budget paper no. 3 · budget paper no. 3, federal financial relations 2019-20, is one of a series...

Federal Financial Relations Budget Paper No. 3

2019–20

Circulated by

The Honourable Josh Frydenberg MP Treasurer of the Commonwealth of Australia

and

Senator the Honourable Mathias Cormann Minister for Finance and the Public Service

of the Commonwealth of Australia

For the information of honourable members on the occasion of the Budget 2019–20

2 April 2019

© Commonwealth of Australia 2019

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iii

FOREWORD

This Budget Paper presents information on the Australian Government’s financial

relations with state, territory and local governments. This includes an overview of

major Australian Government reforms and new developments, as well as information

on payments to the states and analysis of fiscal developments in the public sector.

NOTES

(a) The following definitions are used in this Budget Paper:

– Budget year refers to 2019–20, while the forward years refer to 2020–21,

2021-22 and 2022–23; and

– one billion is equal to one thousand million.

(b) Except where otherwise indicated, payments to the states in this Budget Paper

are reported in expense terms, not cash terms.

(c) Figures in tables and the text have generally been rounded. Discrepancies in

tables between totals and sums of components reflect rounding unless otherwise

noted.

– Estimates of $100,000 and over are generally rounded to the nearest tenth of a

million.

– Estimates midway between rounding points are rounded up.

– Percentage changes in tables are based on the underlying unrounded

amounts.

(d) Tables use the following notations:

- nil

na not applicable

$m millions of dollars

$b billions of dollars

nfp not for publication

* unquantifiable

.. not zero, but rounded to zero

~ allocation not yet determined

Budget Paper No. 3

iv

(e) This Budget Paper uses the following conventions.

– The Australian Capital Territory and the Northern Territory of Australia are

referred to as ‘the territories’.

– References to the ‘states’ or ‘each state’ include state governments and

territory governments.

– Local governments are instrumentalities of state governments. Consequently,

payments made to the state government sector include payments made to the

local government sector unless otherwise specified.

– The following abbreviations are used, where appropriate:

NSW New South Wales

VIC Victoria

QLD Queensland

WA Western Australia

SA South Australia

TAS Tasmania

ACT Australian Capital Territory

NT Northern Territory

GST Goods and Services Tax

(f) The term ‘Commonwealth’ refers to the Commonwealth of Australia. The term

is used when referring to the legal entity of the Commonwealth of Australia.

The term ‘Australian Government’ is used when referring to the Government of,

and the decisions and activities made by the Government on behalf of, the

Commonwealth of Australia.

Appendix B, Total Payments to the States by Government Finance Statistics Function;

Appendix C, Supplementary Tables; Appendix D, Debt Transactions; and Appendix E,

Appropriations and Conditions are available online at: www.budget.gov.au.

Budget Paper No. 3, Federal Financial Relations 2019-20, is one of a series of Budget

Papers that provides information to supplement the Budget Speech. A full list of the

series is printed on the inside cover of this paper.

http://www.budget.gov.au/

v

CONTENTS

Foreword ........................................................................................................ iii Notes ............................................................................................................................... iii

Part 1: Australia’s Federal Relations ............................................................. 1 Overview ......................................................................................................................... 1 Australian Government funding to the states .................................................................. 3

Part 2: Payments for specific purposes ...................................................... 13

Overview ....................................................................................................................... 13 Health ............................................................................................................................ 17 Education ...................................................................................................................... 30 Skills and workforce development................................................................................. 34 Community services ...................................................................................................... 37 Affordable housing ........................................................................................................ 41 Infrastructure ................................................................................................................. 44 Environment .................................................................................................................. 55 Contingent payments .................................................................................................... 65 Other national partnership payments ............................................................................ 67

Part 3: General revenue assistance ............................................................ 73

Overview ....................................................................................................................... 73 Other general revenue assistance ................................................................................ 82 Mirror tax arrangements ................................................................................................ 84

Part 4: Developments in the Consolidated Non-Financial Public Sector ............................................................................................... 85

Introduction .................................................................................................................... 85 Net operating balance ................................................................................................... 85 Fiscal and cash balances .............................................................................................. 86 Net debt ......................................................................................................................... 88

Appendix A: Parameters and Further Information ..................................... 91

Population ..................................................................................................................... 91 Wage cost indices ......................................................................................................... 92 Data sources ................................................................................................................. 92 Further information ........................................................................................................ 93

Budget Paper No. 3

vi

LIST OF TABLES

Table 1.1: Australian Government payments to the states, 2018–19 to 2022–23 .......... 5 Table 1.2: Total Australian Government payments to the states as a proportion

of GDP ......................................................................................................... 6 Table 1.3: Australian Government’s contribution to state expenditure ........................... 7 Table 1.4: Measures affecting payments to the states ................................................... 8 Table 2.1: Total payments for specific purposes by category, 2018–19

to 2022–23 ................................................................................................. 14 Table 2.2: Payments for specific purposes by sector and category, 2018–19

to 2022–23 ................................................................................................. 16 Table 2.3: Payments to support state health services .................................................. 17

Table 2.3.1 Health services ......................................................................... 19 Table 2.3.2 Health infrastructure ................................................................. 23 Table 2.3.3 Indigenous health ..................................................................... 25 Table 2.3.4 Other health National Partnership payments ........................... 27

Table 2.4: Payments to support state education services ............................................ 30 Table 2.5: Payments to support state skills and workforce development services ....... 34 Table 2.6: Payments to support state community services .......................................... 37 Table 2.7: Payments to support state affordable housing services .............................. 41 Table 2.8: Payments to support state infrastructure services ....................................... 44 Table 2.9: Payments to support state environment services ........................................ 55 Table 2.10: Contingent payments to the states ............................................................ 65 Table 2.11: Payments to support other state services .................................................. 67 Table 3.1: General revenue assistance ........................................................................ 74 Table 3.2: General revenue assistance by state ........................................................... 75 Table 3.3: Reconciling GST revenue, GST entitlement and GST payments to

the states.................................................................................................... 77 Table 3.4: Reconciliation of the GST entitlement estimates since the

2018–19 Budget and 2018–19 MYEFO ..................................................... 77 Table 3.5: Policy decisions since the 2018–19 MYEFO that affect the

GST entitlement ......................................................................................... 79 Table 3.6: Calculation of GST entitlements .................................................................. 80 Table 3.7: Reconciliation of the GST administration budget ......................................... 82 Table 3.8: Other general revenue assistance ............................................................... 82 Table 3.9: Mirror taxes accrued on behalf of the states ................................................ 84 Table A.1: Population by state, at 31 December .......................................................... 91 Table A.2: Net overseas migration ................................................................................ 92 Table A.3: Net interstate migration................................................................................ 92 Table A.4: Wage cost indices ........................................................................................ 92

Contents

vii

LIST OF CHARTS

Chart 1.1: Payments for specific purposes 2019–20, by sector ..................................... 4 Chart 1.2: Total Australian Government payments to the states, 2019–20 .................... 6 Chart 3.1: Growth in the states’ GST entitlements ........................................................ 74 Chart 4.1: Consolidated net operating balance by Institution ....................................... 86 Chart 4.2: Consolidated fiscal balance by institution .................................................... 87 Chart 4.3: Consolidated cash balance by institution ..................................................... 88 Chart 4.4: Consolidated net debt by institution (as at end of financial year) ................ 89

1

PART 1: AUSTRALIA’S FEDERAL RELATIONS

OVERVIEW

In 2019–20, the Australian Government will provide the states with $127.4 billion in

total payments, including payments of $58.3 billion for specific purposes like schools

and hospitals and general revenue assistance of $69.1 billion.

The Australian Government will:

• provide a record $100 billion in funding for its infrastructure plan over the next

decade. New major transport projects and initiatives include:

– a new fast rail plan for Australia including a $2 billion contribution to the

Melbourne-Geelong fast rail project;

– a $3 billion increase to the Urban Congestion Fund including $500 million for a

new Commuter Car Park Fund;

– $2.2 billion for the Road Safety Package; and

– an additional $1 billion for the next phase of the Roads of Strategic

Importance initiative.

• permanently boost the size of the GST pool to be distributed among the states each

year. In 2021-22, the Australian Government will inject $600 million into the GST

pool, followed by a further $250 million in 2024-25, with both of these amounts to

grow each and every year in line with the underlying growth of the GST;

• provide $1.5 billion in GST top-up payments to Western Australia and the

Northern Territory for 2019-20, and an estimated $2.3 billion in total until 2021-22,

to support the transition to the new horizontal fiscal equalisation system passed by

the Parliament in 2018;

• support public hospitals through increased funding of $1.4 billion from 2019-20 to

2021-22 reflecting revised activity estimates from the states;

• invest $291.6 billion in schools over the next 10 years. This is an increase in

Australian Government funding per student of 46 per cent over the next 10 years.

The Government is addressing the findings of the Review to Achieve Educational

Excellence in Australian Schools (Gonski 2.0) and is working with the states to lift

student outcomes across Australian schools;

• as part of the broader $1.3 billion Community Health and Hospitals Program,

provide $425.3 million over five years from 2018-19 for a range of initiatives that

will contribute to improved health services across Australia;

Budget Paper No. 3

2

• provide $449.5 million for universal access to early childhood education, to extend

Australian Government funding for preschool services in the 2020 school year;

• provide $300 million to Queensland for grant assistance to primary producers

impacted by the North Queensland floods;

• provide $56 million to the Marinus Link project which will support a second

electricity transmission interconnector between Tasmania and the mainland, to

unlock and share the benefits of pumped hydro storage potential in Tasmania; and

• provide an additional $30.5 million over three years from 2020-21 for legal

assistance services, bringing total Australian Government funding to $1.2 billion.

Part 1: Australia’s Federal Relations

3

AUSTRALIAN GOVERNMENT FUNDING TO THE STATES

The Australian Government provides substantial levels of funding to the states in key

sectors such as health, education, community services and infrastructure and continues

to support important productivity-enhancing projects and reforms. In addition, the

Australian Government provides general revenue assistance which can be spent

according to states’ own budget priorities.

In aggregate, the states are estimated to receive Australian Government payments of

$127.4 billion in 2019–20.

Total payments to the states in 2019–20 are estimated to be 25.4 per cent of total

Australian Government expenditure and account for about 44.6 per cent of total state

revenue. Australian Government payments effectively support about 46 per cent of

state expenditure, as shown in Table 1.3.

Payments for specific purposes

In 2019–20, the Australian Government will provide the states with $58.3 billion in

payments for specific purposes. Payments for specific purposes are estimated to make

up 11.6 per cent of total Australian Government expenditure in 2019–20.

National Specific Purpose Payments (National SPPs), National Health Reform, the

National Housing and Homelessness Agreement and Quality Schools funding are

expected to total $46.8 billion in 2019–20, an increase of $1.3 billion or 2.9 per cent

compared to 2018-19.

National Partnership payments are expected to be $11.5 billion in 2019–20. This

includes new agreements for the Community Health, Hospitals and Infrastructure

projects and disaster risk reduction.

Part 2 of this Budget Paper provides further information on payments to the states for

specific purposes. Chart 1.1 illustrates estimated specific purpose payments to the

states in 2019–20 by function.

Budget Paper No. 3

4

Chart 1.1: Payments for specific purposes 2019–20, by sector

Health $22.8b

Education $21.5b

Skills and w orkforce

development $1.7b

Community services $2.0b

Affordable housing $1.7b

Infrastructure $6.5b

Environment $0.4b Other $1.7b

General revenue assistance

General revenue assistance, which principally comprises the GST entitlement, provides

untied funding to support the delivery of state services.

In 2019–20, the states are expected to receive $69.1 billion in general revenue

assistance, comprising $67.2 billion for the GST entitlement and $1.9 billion for other

general revenue assistance. This is an increase of $1.9 billion (2.9 per cent) from

$67.1 billion in 2018–19. General revenue assistance to the states is estimated to

represent 13.8 per cent of total Australian Government expenditure in 2019–20.

Part 3 contains further details of general revenue assistance to the states.


5

Payments to the states

Total Australian Government payments to the states are shown in Table 1.1.

Table 1.1: Australian Government payments to the states, 2018–19 to 2022–23

$million NSW VIC QLD WA SA TAS ACT NT Total

2018-19

Payments for specific

purposes(a) 17,582 14,212 14,469 6,207 4,462 1,443 966 1,254 60,870

GST entitlement(b) 17,953 16,810 14,441 3,216 6,716 2,449 1,308 2,739 65,630

Other general revenue

assistance(c) 50 25 - 468 - - 40 - 1,504

Total payments to the states 35,585 31,046 28,910 9,891 11,178 3,892 2,314 3,993 128,004

2019-20


purposes(a) 17,492 13,874 12,564 6,712 3,964 1,229 944 1,220 58,305

GST entitlement(b) 18,714 17,266 14,214 3,581 6,759 2,475 1,410 2,781 67,200


assistance(c) - - - 847 - - 41 252 1,853


2020-21


purposes(a) 18,528 14,674 13,972 6,568 3,958 1,360 1,000 1,184 61,994

GST entitlement(b) ~ ~ ~ ~ ~ ~ ~ ~ 70,010


assistance(c) - - - 585 - - 41 - 1,246


2021-22


purposes(a) 18,853 15,494 14,907 7,070 4,050 1,430 1,049 1,200 64,726



assistance(c) - - - 319 - - 42 - 937


2022-23


purposes(a) 19,976 17,090 15,345 7,463 4,286 1,583 1,110 1,308 68,944



assistance(c) - - - 23 - - 43 - 586

Total payments to the states 19,976 17,090 15,345 7,486 4,286 1,583 1,153 1,308 147,552 (a) State allocations for a number of programs have yet to be determined. These payments are not reflected

in state totals. As a result, total payments for specific purposes may not equal the sum of the state figures.

(b) State allocations are dependent upon the GST revenue sharing relativities for each financial year. These relativities are not forecast beyond the Budget year.

(c) As state allocations for royalties are not published due to commercial sensitivities, these payments are not reflected in state totals. Total general revenue assistance does not therefore equal the sum of the state figures.

Budget Paper No. 3

6

For 2019–20, total payments to the states are estimated to be 6.4 per cent of GDP.

Payments for specific purposes are estimated to be 2.9 per cent of GDP and general

revenue assistance is estimated to be 3.4 per cent of GDP.

Table 1.2: Total Australian Government payments to the states as a proportion of GDP

$million 2018-19 2019-20 2020-21 2021-22 2022-23

Payments for specific purposes

National SPPs 2,475 1,712 1,564 1,590 1,616

National Health Reform funding 21,708 22,535 23,622 24,815 26,183

Quality Schools funding 19,706 20,944 22,578 23,984 25,436

National Housing and Homelessness

funding 1,536 1,565 1,598 1,566 1,591

National Partnership payments(a) 15,445 11,550 12,631 12,772 14,119

Total payments for specific purposes 60,870 58,305 61,994 64,726 68,944

Per cent change from previous year 8.5 -4.2 6.3 4.4 6.5

Per cent of GDP 3.1 2.9 3.0 3.0 3.0

General revenue assistance

GST entitlement 65,630 67,200 70,010 74,130 78,021

Other general revenue assistance 1,504 1,853 1,246 937 586

Total general revenue assistance 67,134 69,053 71,256 75,067 78,608

Per cent change from previous year 4.6 2.9 3.2 5.3 4.7

Per cent of GDP 3.5 3.4 3.4 3.5 3.5

Total payments to the states 128,004 127,358 133,250 139,792 147,552

Per cent change from previous year 6.4 -0.5 4.6 4.9 5.6

Per cent of GDP 6.6 6.4 6.4 6.4 6.5 (a) Includes financial assistance grants for local government and payments direct to local government.

Chart 1.2: Total Australian Government payments to the states, 2019–20

National SPPs $1.7b

National Health Reform $22.5b

Quality Schools $20.9b

National Housing and

Homelessness $1.6b

National Partnerships

$11.5b

GST and other GRA $69.1b


7

Table 1.3 provides information on the Australian Government’s financial contributions

to state expenditure in key sectors in 2017–18. It shows that Australian Government

financial assistance in 2017–18 effectively supported 46 per cent of states’ expenditure.

Table 1.3: Australian Government’s contribution to state expenditure

2017-18

Australian

Government tied

payments

$million

State spending

supported by

general revenue

assistance(b)

$million

Total state

spending

$million

State spending

supported by

Australian

Government

revenue

per cent

Education 20,607 12,658 61,298 54.3

Health 20,437 17,439 76,498 49.5

Housing and community amenities 2,128 1,889 8,199 49.0

Transport 6,974 6,261 27,100 48.8

Social protection 2,555 6,328 22,898 38.8

Other functions(a) 3,408 19,622 66,487 34.6

Payments for specific purpose 56,107

General revenue assistance 64,197

Total 262,480 45.8 Source: Australian Government and state government Final Budget Outcomes for 2017-18. Note that 2017-18 data on an ABS Classification of the Functions of Government (COFOG-A) basis is unavailable for the Australian Government and Victoria. Australian Government and Victorian expense by purpose data has been adjusted to align with COFOG-A. (a) ‘Other functions’ includes additional functions not elsewhere itemised but does not include general

revenue assistance. (b) General revenue assistance (GRA) is provided to the States without conditions, to spend according to

their own budget priorities. For illustrative purposes GRA is allocated to expense functions based on the ratio of discretionary spending in each function as a share of states’ total discretionary spending.

Budget Paper No. 3

8

MEASURES AFFECTING PAYMENTS TO THE STATES

Table 1.4 lists all measures in the 2019–20 Budget that affect payments to the states.

Details of the measures are available in Budget Paper No. 2, Budget Measures 2019-20,

arranged by portfolio. Information on the payments affected is available in Parts 2

and 3 of this Budget Paper.

Table 1.4: Measures affecting payments to the states

Payment Section of Budget Paper 3

Measure title Section of Budget Paper 2

Community Health, Hospitals and Infrastructure projects

Part 2 — Health Fighting Cancer — additional infrastructure and services

Expense — Health


Part 2 — Health Guaranteeing Medicare — improved access to diagnostic imaging

Expense — Health


Part 2 — Health Guaranteeing Medicare — strengthening primary care

Expense — Health

Community Health, Hospitals and Infrastructure projects and Grace’s Place

Part 2 — Health Prioritising Mental Health — caring for our community

Expense — Health


Part 2 — Health Supporting Our Hospitals — additional infrastructure and services

Expense — Health


Part 2 — Health Supporting Our Hospitals — Community Health and Hospitals Program

Expense — Health

Universal Access to Early Childhood Education

Part 2 — Education

National Partnership Agreement on Universal Access to Early Childhood Education — further extension

Expense — Education and Training

Skilling Australians Fund and Skills for Tasmania

Part 2 — Skills and Workforce Development

Skills Package — Strengthening our Modern and Adaptive Skills System

Expense — Education and Training

Remote Housing South Australia

Part 2 — Affordable Housing

Remote Housing in South Australia

Expense — Prime Minister and Cabinet

Adelaide City Deal

Part 2 — Infrastructure

Adelaide City Deal Expense — Infrastructure, Regional Development and Cities

Albury Wodonga Regional Deal


Albury Wodonga Regional Deal Expense — Infrastructure, Regional Development and Cities


9



Drought Communities Program and National Partnership for the National Water Infrastructure Development Fund — Capital Component

Part 2 — Infrastructure and Part 2 — Environment

Assistance for Farmers and Farm Communities in Drought — additional funding

Expense — Infrastructure, Regional Development and Cities

Barkly Regional Deal


Barkly Regional Deal Expense — Infrastructure, Regional Development and Cities

Geelong City Deal Part 2 — Infrastructure

Geelong City Deal — additional funding


Hinkler Regional Deal


Hinkler Regional Deal Expense — Infrastructure, Regional Development and Cities

Infrastructure Investment Program


Infrastructure Investment Program — Australian Capital Territory infrastructure investments




Infrastructure Investment Program — New South Wales infrastructure investments




Infrastructure Investment Program — Northern Territory infrastructure investments




Infrastructure Investment Program — Princes Highway




Infrastructure Investment Program — Queensland infrastructure investments




Infrastructure Investment Program — Road Safety and Upgrade Package




Infrastructure Investment Program — Roads of Strategic Importance — next priorities




Infrastructure Investment Program — South Australian infrastructure investment




Infrastructure Investment Program — Tasmanian infrastructure investments




Infrastructure Investment Program — Urban Congestion Fund — next priorities




Infrastructure Investment Program — Victorian infrastructure investments


Budget Paper No. 3

10





Infrastructure Investment Program — Western Australian infrastructure investments




Population Package Expense — Cross Portfolio

Marinus Link Part 2 — Environment

Climate Solutions Package Expense — Environment and Energy

Disaster Risk Reduction

Part 2 — Environment

Natural Disaster Resilience Funding

Expense — Home Affairs

Grants assistance to primary producers impacted by the Queensland floods


North Queensland Flood Recovery Package

Expense — Cross Portfolio

Yellow crazy ant control


Practical Environment Restoration

Expense — Environment and Energy

Pest and disease preparedness and response programs


Red Imported Fire Ants Eradication Program — acceleration

Expense — Agriculture and Water Resources

Disaster Recovery Funding Arrangements

Part 2 — Contingent

Disaster Recovery Funding Arrangements — Funding for Northern Queensland Floods


National mechanism for Commonwealth legal assistance

Part 2 — Other Expensive Commonwealth Criminal Cases Fund — additional funding

Expense — Attorney-General’s


Part 2 — Other Family Advocacy and Support Services — Dedicated Men’s Support Workers


Family law information sharing

Part 2 — Other Fourth Action Plan (2019-22) to reduce violence against women and their children

Expense — Social Services

Financial Assistance Grants

Part 2 — Other Local Government Financial Assistance Grants — prepayment



Part 2 — Other Single National Mechanism for Commonwealth Legal Assistance



11



GST entitlement Part 3 — GST Payments

Better Distribution of Medical Practitioners



Extension of Temporary Graduate visa period for regional graduates

Revenue — Home Affairs


Increasing Work and Holiday Visa Cap for Indonesia

Revenue — Home Affairs


Indirect Tax Concession Scheme — diplomatic, consular and international organisation concessions

Revenue — Treasury


Tax Integrity — increasing engagement and on-time payment of tax and superannuation liabilities

Revenue — Treasury

13

PART 2: PAYMENTS FOR SPECIFIC PURPOSES

OVERVIEW

The Australian Government provides payments to the states for specific purposes in

policy areas for which the states have primary responsibility. These payments cover

most areas of state and local government activity, including health, education, skills

and workforce development, community services, housing, Indigenous affairs,

infrastructure and the environment.

Funding for public hospitals under the National Health Reform Agreement is the

largest single specific purpose payment to the states, estimated at $22.5 billion

in 2019-20.

Schools funding payments under the Australian Education Act 2013 are estimated to be

$20.9 billion in 2019–20, comprising funding for government schools of $8.3 billion and

non-government schools of $12.6 billion.

In 2019–20, the Australian Government supports the states in two service delivery

sectors through National Specific Purpose Payments (National SPPs) — Skills and

Workforce Development and Disability Services. The states are required to spend each

National SPP in the relevant sector.

In 2019-20, the Australian Government is estimated to provide $1.6 billion under the

National Housing and Homelessness Agreement. Funding will support access to

affordable safe and sustainable housing, which includes preventing and

addressing homelessness.

National Partnership payments to the states are the key vehicle to facilitate reforms or

support the delivery of particular projects and services. National Partnerships are

typically entered into for a fixed period of time, reflecting the nature of the project or

reform involved.

To the fullest extent possible, payments under National Partnerships are aligned with

the achievement of milestones and are made after the states have achieved the

outcomes or outputs specified in the relevant agreement. National Partnership

payments are estimated to be $11.5 billion in 2019–20.

National Partnerships and other Commonwealth-State agreements are publicly

available on the Federal Financial Relations website at:

www.federalfinancialrelations.gov.au. Details of the appropriation mechanisms for all

payments to the states and the terms and conditions applying to them are set out in

Appendix E, available online.

http://www.federalfinancialrelations.gov.au/

Budget Paper No. 3

14

Table 2.1: Total payments for specific purposes by category, 2018–19 to 2022–23

$million NSW VIC QLD WA SA TAS ACT NT Total(a)

2018-19

National SPPs 485 811 628 324 105 66 26 31 2,475

National Health Reform funding 6,737 5,050 5,216 2,267 1,320 414 413 291 21,708

Quality Schools funding 6,113 4,896 4,225 1,954 1,375 455 330 353 19,706


Homelessness funding 476 395 314 164 108 33 26 20 1,536

National Partnership

payments(b) 3,772 3,059 4,087 1,498 1,555 475 171 560 15,445

Total payments for specific

purposes 17,582 14,212 14,469 6,207 4,462 1,443 966 1,254 60,870

2019-20

National SPPs 492 402 308 331 105 32 26 15 1,712






payments(b) 3,210 1,972 2,521 1,739 886 265 135 516 11,550


purposes 17,492 13,874 12,564 6,712 3,964 1,229 944 1,220 58,305

2020-21

National SPPs 500 411 313 159 106 33 27 15 1,564






payments(b) 3,390 2,307 3,123 1,427 707 352 140 437 12,631


purposes 18,528 14,674 13,972 6,568 3,958 1,360 1,000 1,184 61,994

2021-22

National SPPs 508 421 318 160 107 33 27 15 1,590






payments(b) 2,913 2,445 3,541 1,629 630 382 153 408 12,772


purposes 18,853 15,494 14,907 7,070 4,050 1,430 1,049 1,200 64,726

Part 2: Payments for specific purposes

15

Table 2.1: Total payments for specific purposes by category, 2018–19 to 2022–23 (continued)

$million NSW VIC QLD WA SA TAS ACT NT Total(a)

2022-23

National SPPs 517 430 323 162 108 33 28 15 1,616






payments(b) 3,179 3,307 3,332 1,698 689 493 164 477 14,119


purposes 19,976 17,090 15,345 7,463 4,286 1,583 1,110 1,308 68,944 (a) As state allocations for a number of programs have not yet been determined, these payments are not

included in state totals. As a result, total payments may not equal the sum of state totals. (b) Includes financial assistance grants for local government and payments direct to local government.

Budget Paper No. 3

16

Table 2.2: Payments for specific purposes by sector and category, 2018–19 to 2022–23

$million 2018-19 2019-20 2020-21 2021-22 2022-23

Health

National Health Reform funding 21,708 22,535 23,622 24,815 26,183

National Partnerships 470 269 211 165 296

Total health payments 22,179 22,804 23,833 24,980 26,478

Education

Quality Schools funding 19,706 20,944 22,578 23,984 25,436


Total education payments 20,240 21,488 22,986 24,074 25,498

Skills and workforce development

National Skills and Workforce

Development SPP 1,517 1,539 1,564 1,590 1,616


Total skills and workforce development

payments 1,679 1,699 1,697 1,723 1,620

Community services

National Disability SPP 958 173 - - -

National Partnerships 3,402 1,820 1,329 1,372 1,104

Total community services payments 4,360 1,993 1,329 1,372 1,104

Affordable housing


Homelessness funding 1,536 1,565 1,598 1,566 1,591


Total affordable housing payments 1,832 1,680 1,712 1,680 1,702

Infrastructure

National Partnerships 6,084 6,528 6,822 7,341 8,843

Environment


Contingent payments

National Partnerships 475 11 2 .. ..

Other

National Partnerships(a) 3,050 1,717 3,151 3,197 3,283

Total payments for specific purposes 60,870 58,305 61,994 64,726 68,944 (a) Includes financial assistance grants for local government.

Further information on each of these payments is contained in this Part. Total

payments to the states for specific purposes, categorised by functions, are set out in

Appendix B, which is available online.


17

HEALTH

In 2019–20, the Australian Government will provide funding of $22.8 billion to support

state health services, including $22.5 billion in National Health Reform funding and

$269.5 million in National Partnership payments, as detailed in Table 2.3.

Table 2.3: Payments to support state health services

$million 2018-19 2019-20 2020-21 2021-22 2022-23

National Health Reform funding 21,708.3 22,534.6 23,622.5 24,815.2 26,182.5

National Partnership payments

Health services 75.7 79.8 85.1 59.7 38.2

Health infrastructure 93.9 24.6 2.7 27.3 -

Indigenous health 18.1 16.3 15.6 7.4 -

Other health payments 282.5 148.7 107.5 70.2 257.7

Total National Partnership payments 470.2 269.5 211.0 164.6 295.9

Total 22,178.5 22,804.1 23,833.5 24,979.8 26,478.4

National Health Reform funding

In 2019–20, National Health Reform funding is estimated to be $22.5 billion. This is an

increase of $826.3 million, or 3.8 per cent, from 2018–19.

National Health Reform funding


2018-19

Hospital services 6,608.6 4,946.3 5,135.1 2,226.0 1,292.3 405.8 406.7 286.8 21,307.5

Public health 128.1 103.9 80.4 41.5 27.7 8.5 6.8 3.9 400.8

Total 6,736.6 5,050.2 5,215.5 2,267.4 1,320.1 414.2 413.4 290.8 21,708.3

2019-20


Public health 134.8 110.1 84.6 43.3 28.9 8.8 7.1 4.1 421.8

Total 6,848.5 5,864.0 4,906.1 2,375.2 1,398.0 424.9 411.8 306.1 22,534.6

2020-21


Public health 142.0 116.7 89.0 45.2 30.2 9.2 7.6 4.3 444.1

Total 7,212.4 5,876.0 5,346.4 2,521.1 1,449.7 442.5 441.4 333.0 23,622.5

2021-22


Public health 149.6 123.8 93.7 47.2 31.5 9.7 8.0 4.4 467.9

Total 7,593.5 6,164.2 5,597.0 2,660.5 1,503.1 461.6 464.0 371.5 24,815.2

2022-23


Public health 157.7 131.2 98.6 49.3 32.8 10.1 8.4 4.6 492.9

Total 7,992.3 6,466.0 5,972.9 2,815.1 1,558.1 481.4 492.4 404.3 26,182.5

Budget Paper No. 3

18

From 2018–19 to 2019–20, National Health Reform funding is linked to growth in public hospital activity, the national efficient price and national efficient cost determined by the Independent Hospital Pricing Authority. Over this period, the Australian Government will fund 45 per cent of the efficient growth in activity based services, with growth in total Australian Government funding capped at 6.5 per cent a year.

The Australian Government has committed to a new health and hospitals agreement

from 2020-21 to 2024-25. Health Ministers are developing the agreement for the

approval of Council of Australian Government before the end of 2019.

Final entitlements to National Health Reform funding, 2016–17


National Health Reform 5,922.8 4,626.9 4,094.2 2,055.0 1,257.7 389.5 364.7 242.5 18,953.3

In September 2018, the Treasurer determined final entitlements for 2016–17

National Health Reform funding in accordance with advice from the Administrator of

the National Health Funding Pool.

Final entitlements to National Health Reform funding, 2017–18


National Health Reform 6,149.3 4,878.7 4,347.6 2,152.3 1,300.5 412.1 373.2 263.4 19,877.0

In March 2019, the Treasurer determined final entitlements for 2017-18

National Health Reform funding in accordance with advice from the Administrator of

the National Health Funding Pool.

National Partnership payments for health

A total of $269.5 million will be provided to the states in 2019–20 under the following

categories:

• health services;

• health infrastructure;

• Indigenous health; and

• other health payments.


19

Health services

In 2019–20, the Australian Government is estimated to provide $79.8 million to support

the delivery of health services in the states.

Table 2.3.1 Health services $million 2018-19 2019-20 2020-21 2021-22 2022-23


Additional assistance for public hospitals 11.7 6.7 18.9 18.7 -

Comprehensive palliative care

across the life course - 9.9 10.5 11.0 11.5

Expansion of the BreastScreen

Australia program 14.9 15.2 15.4 - -

Hummingbird House 0.8 0.8 - - -

Improving Health Services in Tasmania

Subacute and acute projects 5.0 - - - -

Management of Torres Strait / Papua NewGuinea cross-border health issues 4.8 4.9 - - -

Mosquito control and cross border liaison

in the Torres Strait 1.0 1.0 - - -

National Bowel Cancer Screening

Program – participant follow-up function 8.0 8.9 9.1 9.0 -

OzFoodNet 1.8 1.8 - - -

Royal Darwin Hospital – equipped,

prepared and ready 16.3 16.5 16.8 17.0 17.3

Specialist dementia care 0.2 2.8 3.9 4.0 9.4

Vaccine-preventable diseases

surveillance 0.9 0.9 - - -

Victorian Cytology Service 10.3 10.5 10.6 - -

Total 75.7 79.8 85.1 59.7 38.2

National Partnership on additional assistance for public hospitals(a)

NSW VIC QLD WA SA TAS ACT NT Total

2018-19 - - - - - - 11.7 - 11.7

2019-20 - - - - - 6.7 - - 6.7

2020-21 - - - - - 18.9 - - 18.9

2021-22 - - - - - 18.7 - - 18.7

2022-23 - - - - - - - - - (a) Funding is indicative only and will depend on final entitlements to National Health Reform funding from

2017–18 to 2019–20.

The Australian Government will provide funding to Tasmania and the

Australian Capital Territory if growth in National Health Reform funding is lower

than growth in CPI and population in a given year.

National Partnership on comprehensive palliative care across the life course


2018-19 - - - - - - - - -

2019-20 3.2 2.6 2.0 1.0 0.7 0.2 0.2 0.1 9.9

2020-21 3.3 2.7 2.1 1.1 0.7 0.2 0.2 0.1 10.5

2021-22 3.5 2.8 2.2 1.1 0.8 0.2 0.2 0.1 11.0

2022-23 3.7 3.0 2.3 1.2 0.8 0.2 0.2 0.1 11.5

Budget Paper No. 3

20

The Australian Government will provide funding to improve palliative and end-of-life

care coordination for older Australians living in residential aged care.

National Partnership on expansion of the BreastScreen Australia program


2018-19 4.8 3.8 3.0 1.6 1.1 0.3 0.2 0.2 14.9

2019-20 4.9 3.8 3.0 1.6 1.1 0.3 0.2 0.2 15.2

2020-21 4.9 3.9 3.1 1.7 1.1 0.3 0.3 0.2 15.4

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to improve the early detection of

breast cancer by continuing existing arrangements to extend the target age range of the

BreastScreen Australia program from women 50 to 69 years of age to women

50 to 74 years of age. This builds on the existing BreastScreen Australia program,

which commenced in 1991.

National Partnership on Hummingbird House


2018-19 - - 0.8 - - - - - 0.8

2019-20 - - 0.8 - - - - - 0.8

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding for the operation of a dedicated

respite and hospice care facility for children with life-limiting conditions and their

families and carers.

National Partnership on improving health services in Tasmania — subacute and acute projects component


2018-19 - - - - - 5.0 - - 5.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to Tasmania to improve the

whole-of-system approach to subacute and acute services models. The funding also

provides for continued services at the John L. Grove Rehabilitation Centre.


21

National Partnership on management of Torres Strait/Papua New Guinea cross-border health issues


2018-19 - - 4.8 - - - - - 4.8

2019-20 - - 4.9 - - - - - 4.9

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is contributing to the costs of treating

Papua New Guinean nationals who travel through the Torres Strait treaty zone and

access healthcare facilities in the Queensland health and hospitals network.

National Partnership on mosquito control and cross border liaison in the Torres Strait


2018-19 - - 1.0 - - - - - 1.0

2019-20 - - 1.0 - - - - - 1.0

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to assist in mosquito detection and

elimination in the Torres Strait. Funding also supports employment of a

communication officer to improve communication and coordination between Australia

and Papua New Guinea and reduce the spread of communicable diseases in the

Torres Strait.

National Partnership on the national bowel cancer screening program — participant follow-up function


2018-19 2.5 1.9 1.6 0.8 0.6 0.3 0.2 0.1 8.0

2019-20 2.8 2.2 1.8 1.0 0.7 0.3 0.2 0.1 8.9

2020-21 2.8 2.2 1.8 1.0 0.7 0.3 0.2 0.1 9.1

2021-22 2.8 2.2 1.8 1.0 0.7 0.3 0.2 0.1 9.0

2022-23 - - - - - - - - -

This initiative funds the follow-up of participants who return a positive bowel cancer

screening test result and are not recorded as having attended a consultation with a

health professional.

National Partnership on OzFoodNet


2018-19 0.4 0.3 0.3 0.2 0.2 0.2 0.1 0.2 1.8

2019-20 0.4 0.3 0.3 0.2 0.2 0.2 0.1 0.2 1.8

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

Budget Paper No. 3

22

The Australian Government is providing funding for a collaborative initiative with

state health authorities to undertake enhanced surveillance of foodborne disease. The

initiative aims to develop a better understanding of the causes and incidence of

foodborne disease in the community and to build an evidence base for policy

formulation. OzFoodNet coordinates investigations into foodborne disease outbreaks,

particularly those that cross state and country borders.

National Partnership on Royal Darwin Hospital — equipped, prepared and ready


2018-19 - - - - - - - 16.3 16.3

2019-20 - - - - - - - 16.5 16.5

2020-21 - - - - - - - 16.8 16.8

2021-22 - - - - - - - 17.0 17.0

2022-23 - - - - - - - 17.3 17.3

The Australian Government is providing funding to maintain the National Critical

Care and Trauma Response Centre at the Royal Darwin Hospital in a state of readiness

to respond to major health incidents in the region.

National Partnership on specialist dementia care(a)


2018-19 - - - 0.2 - - - - 0.2

2019-20 ~ ~ ~ 0.3 ~ ~ ~ ~ 2.8

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 3.9

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 4.0

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 9.4 (a) All state allocations from 2019–20 have not yet been determined.

The Australian Government will provide funding to deliver a program which will

deliver intensive, specialised care for people with very severe behavioural and

psychological symptoms of dementia.

National Partnership on vaccine-preventable diseases surveillance


2018-19 0.2 0.2 0.2 0.1 0.1 .. .. 0.1 0.9

2019-20 0.2 0.2 0.2 0.1 0.1 .. .. 0.1 0.9

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to improve surveillance reporting of

nationally notifiable vaccine-preventable diseases. This program facilitates national

monitoring, analysis and timely reporting of data to provide an evidence base for

policy formulation.


23

National Partnership on the Victorian Cytology Service


2018-19 - 10.3 - - - - - - 10.3

2019-20 - 10.5 - - - - - - 10.5

2020-21 - 10.6 - - - - - - 10.6

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to the Victorian Cytology Service

which supports the early detection of pre-cancerous cervical conditions by processing

cervical screening tests undertaken by general practitioners and other health

professionals across Australia.

Health infrastructure

In 2019–20, the Australian Government is estimated to provide $24.6 million to support

the development of health-related infrastructure.

Table 2.3.2 Health infrastructure

$million 2018-19 2019-20 2020-21 2021-22 2022-23


Albury-Wodonga Cardiac Catheterisation

Laboratory 1.0 - - - -

Expansion of Clare Holland House 4.0 - - - -

Fussell House accommodation 4.0 2.7 - - -

Grace's Place - 4.1 2.0 - -

Health infrastructure projects 41.7 17.1 - - -

Proton beam therapy facility 40.7 - - 27.3 -

Redevelopment of Strathalbyn

residential aged care facility 2.5 0.7 0.7 - -

Total 93.9 24.6 2.7 27.3 -

National Partnership on the Albury-Wodonga cardiac catheterisation laboratory


2018-19 - 1.0 - - - - - - 1.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding for a new laboratory that will enable

local residents suffering from heart conditions to access quality care, without the need

to travel long distances to capital cities.

Budget Paper No. 3

24

National Partnership on the expansion of Clare Holland House


2018-19 - - - - - - 4.0 - 4.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to expand Clare Holland House

which will increase palliative care facilities in the Australian Capital Territory.

National Partnership on the Fussell House accommodation


2018-19 4.0 - - - - - - - 4.0

2019-20 2.7 - - - - - - - 2.7

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding for the development of the

Fussell House accommodation facility which will house veterans and their families

who receive treatment at the National Centre for Veterans’ Healthcare.

National Partnership on Grace’s Place


2018-19 - - - - - - - - -

2019-20 4.1 - - - - - - - 4.1

2020-21 2.0 - - - - - - - 2.0

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government will provide funding to New South Wales to assist with

the construction of Grace’s Place, a residential trauma recovery centre for children and

young people aged between 3 and 18 years impacted by homicide.

A new measure associated with this National Partnership is listed in Table 1.4 and

described in more detail in Budget Paper No. 2, Budget Measures 2019-20.

National Partnership on health infrastructure projects


2018-19 1.9 - 16.5 5.7 - 17.5 - 0.1 41.7

2019-20 - 0.5 - 4.4 - 10.0 - 2.2 17.1

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding for infrastructure projects and

funding to improve access to essential health services for Australians living in rural,

regional and remote areas.


25

National Partnership on the proton beam therapy facility


2018-19 - - - - 40.7 - - - 40.7

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - 27.3 - - - 27.3

2022-23 - - - - - - - - -

The Australian Government is funding the establishment of a proton beam therapy

facility in Adelaide. The technology will be used as an alternative to conventional

radiotherapy to treat people with certain types of cancer and for research.

National Partnership on the redevelopment of Strathalbyn residential aged care facility


2018-19 - - - - 2.5 - - - 2.5

2019-20 - - - - 0.7 - - - 0.7

2020-21 - - - - 0.7 - - - 0.7

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government will provide funding for additional residential aged care

services at the Strathalbyn and District Aged Care Facility.

Indigenous health

In 2019–20, the Australian Government is estimated to provide $16.3 million to the

states for programs to improve the health of Indigenous Australians.

Table 2.3.3 Indigenous health

$million 2018-19 2019-20 2020-21 2021-22 2022-23


Addressing blood-borne viruses and

sexually transmissible infectionsin the Torres Strait 1.1 1.1 - - -

Improving trachoma control services for

Indigenous Australians 5.1 5.2 5.3 - -

Northern Territory remote Aboriginal

investment - health component 6.4 6.7 7.0 7.4 -

Rheumatic fever strategy 5.4 3.2 3.3 - -

Total 18.1 16.3 15.6 7.4 -

National Partnership on addressing blood-borne viruses and sexually transmissible infections in the Torres Strait


2018-19 - - 1.1 - - - - - 1.1

2019-20 - - 1.1 - - - - - 1.1

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

Budget Paper No. 3

26

The Australian Government is providing funding for disease prevention activities,

testing and treatment, and sexual health checks, and to deliver a culturally appropriate

sexual health education campaign.

National Partnership on improving trachoma control services for Indigenous Australians


2018-19 .. - 0.3 1.6 1.3 - - 1.8 5.1

2019-20 .. - 0.3 1.7 1.4 - - 1.9 5.2

2020-21 .. - 0.3 1.7 1.4 - - 1.9 5.3

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding for trachoma control activities in

jurisdictions where trachoma, an infectious disease which can lead to blindness,

is endemic.

National Partnership on Northern Territory remote Aboriginal investment — health component


2018-19 - - - - - - - 6.4 6.4

2019-20 - - - - - - - 6.7 6.7

2020-21 - - - - - - - 7.0 7.0

2021-22 - - - - - - - 7.4 7.4

2022-23 - - - - - - - - -

The Australian Government provides funding to supplement primary health care

services in remote Northern Territory communities and position the

Northern Territory for the long-term sustainability of its services to Indigenous

Australians. The funding includes support for the provision of integrated oral and

hearing health services to children in remote communities.

This National Partnership supports the Northern Territory to improve schooling for

Aboriginal children, to make communities safer and healthier, and increase access to

interpreter services and job opportunities for Aboriginal Australians. Other

components of the National Partnership are discussed in the Community Services,

Education and Affordable Housing sections of this Part.

National Partnership on rheumatic fever strategy


2018-19 - - 1.8 1.8 0.8 - - 0.9 5.4

2019-20 - - 0.9 0.9 0.4 - - 0.9 3.2

2020-21 - - 1.0 1.0 0.4 - - 1.0 3.3

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to programs that register and control

acute rheumatic fever and rheumatic heart disease in Indigenous children.


27

Other health payments

In 2019–20, the Australian Government is estimated to provide $148.7 million to the

states for other health-related National Partnerships.

Table 2.3.4 Other health National Partnership payments

$million 2018-19 2019-20 2020-21 2021-22 2022-23


Community Health, Hospitals and

Infrastructure projects 69.9 20.2 40.0 54.0 241.3

Encouraging more clinical trials in Australia 1.5 1.5 1.5 - -

Electronic recording and reporting

of controlled drugs 3.2 - - - -

Essential vaccines 15.5 15.9 16.0 16.2 16.4

Health Innovation Fund 50.0 - 50.0 - -

National Coronial Information System 0.4 0.4 - - -

Public dental services for adults 136.1 107.8 - - -

Suicide prevention 6.0 3.0 - - -

Total 282.5 148.7 107.5 70.2 257.7

National Partnership on Community Health, Hospitals and Infrastructure projects


2018-19 9.9 3.5 8.1 8.2 30.0 9.4 0.8 0.1 69.9

2019-20 2.8 - 3.5 3.5 - 7.4 2.3 0.7 20.2

2020-21 2.8 4.5 7.3 12.5 - 9.0 1.5 2.5 40.0

2021-22 1.0 5.0 14.2 20.3 3.0 9.0 1.5 - 54.0

2022-23 48.3 58.3 47.1 41.8 11.1 5.0 9.0 20.7 241.3

The Australian Government is providing funding to all states for vital health

infrastructure and services to ensure Australians can access the care they need, where

they need it.

New measures associated with this National Partnership are listed in Table 1.4 and


National Partnership on encouraging more clinical trials in Australia


2018-19 0.3 0.2 0.3 0.2 0.1 0.1 0.2 0.1 1.5

2019-20 0.3 0.2 0.3 0.2 0.1 0.1 0.2 0.1 1.5

2020-21 0.3 0.2 0.3 0.2 0.1 0.1 0.2 0.1 1.5

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to increase the number and value of

clinical trials to deliver health benefits, provide jobs and improve the nation’s

innovative capacity.

Budget Paper No. 3

28

National Partnership on electronic recording and reporting of controlled drugs(a)


2018-19 ~ ~ ~ ~ ~ ~ ~ ~ 3.2

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - (a) State allocations for 2018–19 have not yet been determined.

The Australian Government will provide funding to support the incorporation of state

system enhancements into the national electronic recording and reporting of controlled

drugs system.

National Partnership on essential vaccines


2018-19 5.0 3.6 2.7 1.7 1.1 0.5 0.5 0.5 15.5

2019-20 4.4 3.5 3.2 1.9 1.2 0.6 0.5 0.5 15.9

2020-21 4.5 3.5 3.2 1.9 1.2 0.6 0.6 0.5 16.0

2021-22 4.5 3.6 3.2 2.0 1.2 0.6 0.6 0.5 16.2

2022-23 4.5 3.6 3.3 2.0 1.2 0.6 0.6 0.5 16.4

The Australian Government is providing funding to improve the health of Australians

through the cost-effective delivery of the National Immunisation Program.

National Partnership on the Health Innovation Fund(a)


2018-19 36.7 - - 13.3 - - - - 50.0

2019-20 - - - - - - - - -

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 50.0

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - (a) State allocations for 2020–21 have not yet been determined.

The Australian Government will provide funding to support the delivery of projects in

health prevention and the better use of health data.

National Partnership on the National Coronial Information System


2018-19 - 0.4 - - - - - - 0.4

2019-20 - 0.4 - - - - - - 0.4

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding for the administration, maintenance

and improvement of Australia’s national coronial data base.


29

National Partnership on public dental services for adults


2018-19 34.4 26.9 49.5 9.7 9.4 3.4 1.4 1.4 136.1

2019-20 34.4 26.9 21.7 9.7 9.4 3.4 1.0 1.4 107.8

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to support the improved oral health

of patients who rely on the public dental system.

National Partnership on suicide prevention(a)


2018-19 1.3 0.8 - - - 0.3 0.3 - 6.0

2019-20 1.3 0.5 - - - 0.5 - - 3.0

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - (a) Totals include unallocated funding.

The Australian Government is providing funding to assist in reducing the risk of

suicide by funding infrastructure projects, such as barriers, fencing and lighting, at

identified locations.

Budget Paper No. 3

30

EDUCATION


state education services, including $20.9 billion in Quality Schools funding and

$544.2 million through National Partnership payments, as detailed in Table 2.4.

Table 2.4: Payments to support state education services

$million 2018-19 2019-20 2020-21 2021-22 2022-23

Quality Schools funding 19,706.3 20,944.1 22,578.2 23,983.6 25,436.1


MoneySmart teaching 2.5 1.3 1.3 - -

National school chaplaincy program 61.4 61.4 61.4 61.4 61.4

Northern Territory Remote Aboriginal

investment(a)

Children and schooling component 37.5 37.3 30.2 29.3 -

School pathways program 1.2 1.2 - - -

Universal access to early childhood education 431.5 442.9 314.7 - -


Total 20,240.5 21,488.3 22,985.9 24,074.3 25,497.5

Memorandum item – payments for non-government

schools included in payments above

Quality Schools funding 12,019.9 12,616.3 13,581.0 14,309.0 15,049.1 (a) Includes funding for non-government representative bodies.

Quality Schools funding

The Australian Government’s Quality Schools policy aims to improve the educational

outcomes of Australian students and their schools.

In 2019–20, the Australian Government will provide $20.9 billion in Quality Schools

funding to government and non-government schools in all states. This includes

recurrent funding, capital funding, special circumstances funding for non-government

schools, funding for non-government school reform support funding, and other

prescribed purpose funding.


31

Quality Schools funding $million NSW VIC QLD WA SA TAS ACT NT Total

2018-19

Government schools(a) 2,428.7 1,768.8 1,734.8 739.7 515.7 198.7 107.3 192.8 7,686.5

Non-government

schools(b)(c)(d) 3,684.2 3,127.2 2,489.8 1,214.1 859.4 256.0 222.6 160.6 12,019.9

Total 6,112.9 4,896.0 4,224.7 1,953.8 1,375.0 454.7 329.9 353.4 19,706.32019-20


Non-government

schools(b)(c)(d) 3,855.8 3,296.5 2,626.6 1,274.3 903.4 265.0 224.2 167.5 12,616.3

Total 6,456.9 5,229.6 4,508.5 2,100.5 1,465.2 472.7 344.1 363.7 20,944.12020-21


Non-government

schools(b)(c)(d) 4,148.4 3,559.3 2,831.6 1,373.3 975.9 282.1 231.2 177.6 13,581.0

Total 6,932.7 5,662.1 4,863.3 2,291.5 1,585.5 499.4 364.3 377.9 22,578.22021-22

Government schools(a) 2,972.4 2,281.9 2,165.6 1,014.3 664.9 226.7 146.8 201.9 9,674.5

Non-government

schools(b)(c)(d) 4,372.0 3,775.6 2,966.1 1,445.0 1,038.0 294.5 231.5 184.7 14,309.0

Total 7,344.4 6,057.5 5,131.7 2,459.3 1,702.9 521.2 378.3 386.6 23,983.62022-23

Government schools(a) 3,175.2 2,475.5 2,301.6 1,113.7 722.9 235.9 161.6 200.4 10,386.9

Non-government

schools(b)(c)(d) 4,611.4 3,996.9 3,089.8 1,511.3 1,101.3 306.6 238.0 192.1 15,049.1

Total 7,786.6 6,472.4 5,391.4 2,625.0 1,824.2 542.5 399.6 392.5 25,436.1 (a) Includes funding for the Northern Territory to accelerate evidence based reforms to improve outcomes

for vulnerable students. (b) Includes capital funding. (c) Includes special circumstances funding and prescribed circumstances funding. Where state allocations

cannot be determined, a national allocation is included in the total for each year only. As a result, the total for each year does not equal the sum of state figures.

(d) Includes funding for non-government school reform support, and from 2020-21 the choice and affordability fund.

The Australian Government has implemented a new needs-based funding model for

schools which delivers a consistent national approach for all schools in all states.

National Partnership payments for education

In addition to Quality Schools funding, the Australian Government will provide

funding for state education services through a number of National Partnerships.

Budget Paper No. 3

32

National Partnership on MoneySmart teaching(a)


2018-19 ~ ~ ~ 0.3 0.3 0.3 0.1 ~ 2.5

2019-20 ~ ~ ~ 0.1 0.1 0.1 0.1 ~ 1.3

2020-21 ~ ~ ~ 0.1 0.1 0.1 0.1 ~ 1.3

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - (a) State allocations will be determined on signing of the agreement.

The Australian Government supports the delivery of professional learning to teachers

in primary and secondary schools and the development of materials to improve

financial literacy education in schools.

National Partnership on the national school chaplaincy program(a)


2018-19 11.3 12.8 18.4 7.7 7.6 2.2 1.0 0.5 61.4

2019-20 11.3 12.8 18.4 7.7 7.6 2.2 1.0 0.5 61.4

2020-21 11.3 12.8 18.4 7.7 7.6 2.2 1.0 0.5 61.4

2021-22 11.3 12.8 18.4 7.7 7.6 2.2 1.0 0.5 61.4

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 61.4 (a) State allocations for 2022-23 have not yet been determined.

This program supports the wellbeing of students through the provision of pastoral

care services in participating schools.

National Partnership on the Northern Territory Remote Aboriginal investment — children and schooling component


2018-19 - - - - - - - 37.5 37.5

2019-20 - - - - - - - 37.3 37.3

2020-21 - - - - - - - 30.2 30.2

2021-22 - - - - - - - 29.3 29.3

2022-23 - - - - - - - - -

The Australian Government provides funding to improve student attendance,

educational attainment, Indigenous workforce development and teacher housing in

remote and very remote schools.




components of this National Partnership are discussed in the Health, Community

Services and Affordable Housing sections of this Part.


33

National Partnership on the school pathways program


2018-19 - - - 0.6 0.6 - - - 1.2

2019-20 - - - 0.6 0.6 - - - 1.2

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

This program assists in providing a career path for young people to enter the defence

industry. It focuses on increasing the number of students undertaking subjects relevant

to the defence industry in participating schools.

National Partnership on universal access to early childhood education


2018-19 124.9 120.9 88.0 46.3 28.2 9.3 9.1 4.8 431.5

2019-20 131.2 126.0 86.6 46.9 28.6 9.4 9.4 4.8 442.9

2020-21 95.7 91.6 57.6 32.6 20.2 6.9 6.7 3.3 314.7

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is supporting preschool participation for all Australian

children in the year before full-time school for 600 hours per year, or

15 hours per week. The funding is designed to top up arrangements states already

have in place for preschool provision. The funding supports increased participation for

Indigenous and disadvantaged children, and also aims to ensure national consistency

in terms of quality and the availability of hours per week.


described in more detail in Budget Paper No. 2, Budget Measures 2019–20.

Budget Paper No. 3

34

SKILLS AND WORKFORCE DEVELOPMENT


state skills and workforce development services, including $1.5 billion through the

National Skills and Workforce Development SPP and $160.4 million through National

Partnership payments, as detailed in Table 2.5.

Table 2.5: Payments to support state skills and workforce development services

$million 2018-19 2019-20 2020-21 2021-22 2022-23

National Skills and Workforce

Development SPP 1,516.9 1,538.6 1,563.9 1,589.6 1,615.5


Skills for Tasmania - 2.3 4.6 4.6 4.7

Job Ready Generation Package - North-West

Tasmania 3.2 - - - -

Skilling Australians Fund 158.5 158.1 129.0 128.7 -


Total 1,678.5 1,699.0 1,697.5 1,723.0 1,620.2

National Agreement for Skills and Workforce Development

The National Agreement for Skills and Workforce Development identifies the

long-term objectives of the Australian Government and the states in the areas of skills

and workforce development.

The Agreement seeks to deliver a vocational education and training system with

improved quality and greater transparency for students, employers and governments,

greater access to training opportunities, improved outcomes for disadvantaged

students, and greater efficiency. It also aims to achieve a more demand-driven and

client-focused system, and to drive the next wave of innovation and productivity.

National Skills and Workforce Development SPP


2018-19 484.8 393.4 304.3 157.0 105.0 32.0 25.6 14.9 1,516.9

2019-20 491.8 401.7 308.4 158.0 105.5 32.2 26.1 14.9 1,538.6

2020-21 500.0 411.1 313.3 159.2 106.2 32.5 26.6 15.0 1,563.9

2021-22 508.4 420.5 318.3 160.5 106.9 32.9 27.1 15.1 1,589.6

2022-23 516.8 430.1 323.3 161.7 107.7 33.2 27.7 15.2 1,615.5

The National Skills and Workforce Development SPP is the funding associated with

the National Agreement for Skills and Workforce Development.

The total amount of the payment is indexed each year by a composite of Wage Cost

Index 1 (85 per cent) and Wage Cost Index 6 (15 per cent) — see Appendix A. The

growth factor is estimated to be 1.43 per cent in 2019–20.


35

National Partnership payments for skills and workforce development

In addition to the National Skills and Workforce Development SPP, the

Australian Government will provide funding through a number of National

Partnerships as detailed below.

National Partnership on skills for Tasmania


2018-19 - - - - - - - - -

2019-20 - - - - - 2.3 - - 2.3

2020-21 - - - - - 4.6 - - 4.6

2021-22 - - - - - 4.6 - - 4.6

2022-23 - - - - - 4.7 - - 4.7

The Australian Government will provide fee-free training and support for training

materials to encourage Tasmanians to train in areas of priority skills needs.



National Partnership on job ready generation package — north-west Tasmania


2018-19 - - - - - 3.2 - - 3.2

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government supports the delivery of training, workforce planning and

job matching initiatives in north-west Tasmania that are focused on meeting the skill

needs of industry in the region.

National Partnership on the Skilling Australians Fund


2018-19 93.8 - - 30.5 20.3 6.1 4.9 2.9 158.5

2019-20 93.9 - - 30.3 20.1 6.1 4.9 2.8 158.1

2020-21 76.8 - - 24.7 16.3 4.9 4.0 2.3 129.0

2021-22 76.9 - - 24.6 16.2 4.9 4.0 2.3 128.7

2022-23 - - - - - - - - -

The National Partnership on the Skilling Australians Fund supports the training of

Australians through a range of projects focused on skills priorities. These include

training in occupations in high demand, those that rely on skilled migration, future

growth industries, and rural and regional areas. There is also a strong focus on

apprenticeships and traineeships.

The National Partnership provides signatory states with an annual amount of

guaranteed funding and a further amount determined by the revenue paid into the

Budget Paper No. 3

36

Skilling Australians Fund. The revenue in the Fund is drawn from a levy which is paid

by businesses employing foreign workers on certain skilled visas.


described in more detail in Budget Paper No. 2, Budget Measures 2019–20.


37

COMMUNITY SERVICES

In 2019-20, the Australian Government will provide funding of $2.0 billion to support

state community services, including $172.9 million through the National Disability SPP

and $1.8 billion through National Partnership payments, as detailed in Table 2.6.

Table 2.6: Payments to support state community services

$million 2018-19 2019-20 2020-21 2021-22 2022-23

National Disability SPP 958.2 172.9 - - -


Northern Territory remote Aboriginal

investment

Community safety implementation plan 53.7 44.4 34.7 36.0 -

Pay equity for the social and community

services sector 195.9 33.3 - - -

Payments from the DisabilityCare Australia

Fund 2,976.1 1,713.3 1,294.7 1,336.2 1,103.5

Specialist disability services 167.8 28.2 - - -

Transition to NDIS in Western Australia 7.0 - - - -

Women's Safety Package Technology Trials 1.7 0.9 - - -

Total National Partnership payments 3,402.2 1,820.1 1,329.4 1,372.2 1,103.5

Total 4,360.4 1,993.0 1,329.4 1,372.2 1,103.5

National Disability Agreement

The National Disability Agreement commits the Australian Government and the

states, through the provision of disability support services, to helping people with

disabilities and their carers achieve an enhanced quality of life and participate as

valued members of the community. The National Disability SPP is the funding

associated with the National Disability Agreement.

The Australian Government is also working with the states to implement the National

Disability Insurance Scheme (NDIS), which is fundamentally changing the nature of

disability care and support in Australia. When the NDIS reaches full scheme in a state,

the National Disability SPP will be redirected to the National Disability Insurance

Agency (NDIA). The NDIA will be responsible for administering the NDIS in

every state.

From 2020–21, National Disability SPP funding for Western Australia will be

redirected to support the NDIS.

Budget Paper No. 3

38

National Disability SPP(a)


2018-19 - 418.1 323.4 166.9 - 34.0 - 15.8 958.2

2019-20 - - - 172.9 - - - - 172.9

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - (a) A zero entitlement to National Disability SPP funding indicates that the NDIS has been fully rolled out in

that state.

The Intergovernmental Agreement on Federal Financial Relations 2009 defines the

annual growth factor for the National Disability SPP as the rolling five-year average of

year-on-year growth in nominal gross domestic product. The growth factor is

estimated to be 4.5 per cent in 2019–20.

National Partnership payments for community services

In addition to the National Disability SPP, the Australian Government provides

funding through National Partnerships as detailed below.

National Partnership on Northern Territory remote Aboriginal investment — community safety implementation plan


2018-19 - - - - - - - 53.7 53.7

2019-20 - - - - - - - 44.4 44.4

2020-21 - - - - - - - 34.7 34.7

2021-22 - - - - - - - 36.0 36.0

2022-23 - - - - - - - - -

The Australian Government is providing funding to the Northern Territory to make

remote communities safer, improve child and family safety and address

alcohol-related harm through this implementation plan.




components of this National Partnership are discussed in the Health, Education and

Affordable Housing sections of this Part.

National Partnership on pay equity for the social and community services sector


2018-19 31.9 45.8 48.4 59.6 - 5.2 0.9 4.0 195.9

2019-20 - - - 33.3 - - - - 33.3

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is funding its share of the wage increases arising from the

Fair Work Commission’s 2012 decision to grant an Equal Remuneration Order for the

Social, and Community and Disability Services Sector. This includes funding for the


39

Australian Government’s share of the wage increases for in-scope programs funded

through existing National SPPs and National Partnerships.

National Partnership on payments from the DisabilityCare Australia Fund(a)


2018-19 547.0 1,101.6 838.6 49.7 295.3 101.8 - 42.2 2,976.1

2019-20 607.0 244.0 197.4 512.8 72.7 22.5 47.2 9.7 1,713.3

2020-21 618.0 252.5 204.3 94.4 75.2 23.3 16.8 10.0 1,294.7

2021-22 630.0 261.4 211.5 103.6 77.9 24.1 17.4 10.4 1,336.2

2022-23 349.8 270.5 218.9 129.9 80.6 25.0 18.0 10.8 1,103.5 (a) Funding amounts are indicative estimates only. Negotiations are continuing with the states on

drawdown arrangements.

This National Partnership partially reimburses the states for expenditure incurred in

relation to the National Disability Insurance Scheme Act 2013. Under the DisabilityCare

Australia Fund Act 2013, a proportion of the funding held in the DisabilityCare

Australia Fund has been allocated to the states over a 10 year period.

National Partnership on specialist disability services


2018-19 - 76.6 45.4 27.3 - 12.3 - 6.3 167.8

2019-20 - - - 28.2 - - - - 28.2

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is funding specialist disability services for people aged

65 years and over (50 years and over for Indigenous Australians), in participating

states. This funding is delivered under individual bilateral agreements for the

transition to a NDIS.

Once the NDIS reaches full scheme in a state, funding will be redirected to the

Australian Government Department of Health through the implementation of a new

Australian Government Continuity of Support program.

National Partnership on the transition to the NDIS in Western Australia


2018-19 - - - 7.0 - - - - 7.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government supported Western Australia to make progressive

changes to roles, responsibilities and governance in delivering disability services from

1 July 2017.

Budget Paper No. 3

40

National Partnership on the women’s safety package technology trials


2018-19 0.5 0.5 0.1 - 0.1 0.4 - .. 1.7

2019-20 0.2 .. - - 0.2 0.4 - .. 0.9

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

This program supports a series of trials to test new technologies or innovative uses of

existing technologies to improve the safety of women and children affected by family

and domestic violence.


41

AFFORDABLE HOUSING


state affordable housing services, including $1.6 billion through the National Housing

and Homelessness Agreement (NHHA) and $114.9 million through National

Partnerships, as detailed in Table 2.7.

Table 2.7: Payments to support state affordable housing services

$million 2018-19 2019-20 2020-21 2021-22 2022-23


Homelessness Agreement 1,535.8 1,564.9 1,597.6 1,565.6 1,590.6


National Regulatory System for

Community Housing 0.8 0.3 - - -

Northern Territory remote Aboriginal investment

Remote Australia strategies component 27.3 3.5 3.7 3.7 -

Remote Housing 268.5 110.0 110.0 110.0 110.0

Social Impact Investments

Vulnerable priority groups - 0.5 0.5 0.5 0.5

Youth at risk of homelessness - 0.5 0.5 0.5 0.5


Total 1,832.4 1,679.8 1,712.3 1,680.3 1,701.7

National Housing and Homelessness Agreement


2018-19 476.4 395.3 314.1 163.5 107.5 33.2 26.0 19.7 1,535.8

2019-20 484.2 406.0 319.8 165.9 108.7 33.7 26.7 20.0 1,564.9

2020-21 493.1 417.6 326.1 168.5 110.1 34.3 27.5 20.4 1,597.6

2021-22 493.5 406.1 319.5 161.6 106.5 32.8 26.2 19.3 1,565.6

2022-23 501.6 415.0 324.4 162.9 107.3 33.1 26.8 19.5 1,590.6

The NHHA is contributing to improving access to affordable, safe and sustainable

housing across the housing spectrum, including to prevent and address homelessness,

and to support social and economic participation. The NHHA will ensure better

outcomes for housing and homelessness funding.

Australian Government funding under the NHHA is ongoing and indexed by Wage

Cost Index 1 (see Appendix A), providing greater certainty for the sector. The

Australian Government’s contribution to homelessness funding will be matched by the

states. Until 30 June 2021, Australian Government funding includes supplementation

to assist with increases in wage costs arising from the Fair Work Commission’s Social,

Community and Disability Services Industry Equal Remuneration Order 2012.

National Partnership payments for affordable housing

The Australian Government will provide a total of $114.9 million in 2019-20 through

National Partnerships to support state affordable housing services. Further details on

these National Partnerships are provided below.

Budget Paper No. 3

42

National Regulatory System for Community Housing


2018-19 0.8 - - - - - - - 0.8

2019-20 0.3 - - - - - - - 0.3

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is supporting the review of the National Regulatory

System for Community Housing to promote a nationally consistent approach to the

regulation of community housing and to provide certainty for community housing

providers and confidence to potential investors.

National Partnership on Northern Territory Remote Aboriginal investment — remote Australia strategies component


2018-19 - - - - - - - 27.3 27.3

2019-20 - - - - - - - 3.5 3.5

2020-21 - - - - - - - 3.7 3.7

2021-22 - - - - - - - 3.7 3.7

2022-23 - - - - - - - - -

The remote Australia strategies component provides funding to improve public

housing in remote communities by investing in housing works and removing asbestos

from community buildings. This funding will also support a sustainable, professional

and accredited Indigenous interpreter service.




components of this National Partnership are discussed in the Health, Education and

Community Services sections of this Part.

This funding complements the funding provided under the National Partnership on

remote housing.

National Partnership on remote housing


2018-19 - - - 121.0 37.5 - - 110.0 268.5

2019-20 - - - - - - - 110.0 110.0

2020-21 - - - - - - - 110.0 110.0

2021-22 - - - - - - - 110.0 110.0

2022-23 - - - - - - - 110.0 110.0

The Australian Government is supporting significant reform in the provision of

housing for Indigenous Australians in remote communities, particularly in the

Northern Territory. This will help address overcrowding, homelessness, poor housing

conditions and severe housing shortages.


43

This funding supports the delivery of new houses, housing refurbishments and

housing-related infrastructure. It also provides incentives to establish more sustainable

housing systems in remote Indigenous communities.



National Partnerships on social impact investments

Vulnerable priority groups(a)


2018-19 - - - - - - - - -

2019-20 ~ ~ ~ ~ ~ ~ ~ ~ 0.5

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 0.5

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 0.5

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 0.5 (a) State allocations from 2019–20 have not yet been determined.

The Australian Government will provide funding to state governments to trial social

impact investments which aim to assist vulnerable priority groups.

Youth at risk of homelessness(a)


2018-19 - - - - - - - - -

2019-20 ~ ~ ~ ~ ~ ~ ~ ~ 0.5

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 0.5

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 0.5

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 0.5 (a) State allocations from 2019–20 have not yet been determined.

The Australian Government will provide funding to state governments to trial social

impact investments which aim to help young people at risk of homelessness.

Budget Paper No. 3

44

INFRASTRUCTURE


state infrastructure projects, as detailed in Table 2.8.

Table 2.8: Payments to support state infrastructure services

$million 2018-19 2019-20 2020-21 2021-22 2022-23



Black Spot Projects 85.0 120.0 110.0 110.0 110.0

Bridges Renewal Program 85.0 121.3 105.0 108.5 85.0

Developing Northern Australia

Improving Cattle Supply Chains 42.6 51.1 0.7 - -

Northern Australia Roads 155.7 210.5 116.0 19.3 -

Heavy Vehicle Safety and Productivity

Program 60.0 95.0 70.0 87.2 65.0

Major Projects Business Case Fund 10.0 40.0 50.0 15.0 25.0

National Rail Program 146.0 231.0 386.4 644.7 1,364.9

Rail investment component 554.9 547.2 391.3 610.3 338.1

Road investment component 3,664.4 3,117.3 3,376.8 3,720.3 4,774.8

Roads of Strategic Importance 12.3 70.8 292.8 400.5 780.5

Roads to Recovery 364.5 499.6 499.6 499.6 499.6

Urban Congestion Fund 40.0 720.0 720.0 720.0 400.0

Infrastructure Growth Package

Asset Recycling Initiative 420.0 - - - -

New investments 105.4 52.4 4.1 - -

Western Sydney Infrastructure Plan 195.9 485.8 428.7 220.1 270.0

Other National Partnership payments

Adelaide City Deal - 4.0 10.0 27.0 23.0

Albury Wodonga Regional Deal - 3.2 - - -

Barkly Regional Deal - 5.7 9.8 6.9 -

Darwin City Deal - 2.3 5.0 10.0 15.0

Drought Communities Program 93.2 15.0 - - -

Geelong City Deal 4.6 26.5 52.2 56.6 32.7

Hinkler Regional Deal - 11.0 15.0 20.0 25.0

Interstate Road Transport 6.4 - - - -

Launceston City Deal - Tamar River - 8.8 8.8 10.3 14.2

Murray-Darling Basin Regional Economic

Diversification Program 17.6 - - - -

Townsville City Deal 5.0 55.0 140.0 50.0 20.0

Western Sydney City Deal 7.8 32.3 30.0 5.0 -

WiFi and Mobile Coverage on Trains 8.0 2.0 - - -

Total 6,084.2 6,527.8 6,822.2 7,341.2 8,842.7

Memorandum item – payments direct to local

governments included in payments above

Drought Communities Program 93.2 15.0 - - -


Roads to Recovery 343.3 473.5 473.5 473.5 473.5

Total 436.5 488.5 473.5 473.5 473.5


45

National Partnership payments for infrastructure


The Australian Government is providing funding for road and rail infrastructure

through the Infrastructure Investment Program under the National Partnership on

land transport infrastructure projects. The Australian Government has established a

10-year funding allocation for this program.

The program assists economic and social development regionally and nationally by

providing funding to improve the performance of land transport infrastructure.

A portion of Australian Government funding for road infrastructure is sourced from

the additional net revenue received from the reintroduction of fuel excise indexation,

announced in the 2014–15 Budget.

The Infrastructure Investment Program includes several components that involve

payments to the states, detailed in the tables below.

Black Spot Projects(a)


2018-19 24.0 20.6 17.6 9.6 6.2 3.3 1.4 2.3 85.0

2019-20 34.6 29.3 24.9 14.4 8.6 3.9 1.7 2.7 120.0

2020-21 34.2 26.0 22.5 12.7 8.3 2.8 1.6 1.9 110.0

2021-22 34.2 26.0 22.5 12.7 8.3 2.8 1.6 1.9 110.0

2022-23 34.2 26.0 22.5 12.7 8.3 2.8 1.6 1.9 110.0 (a) Some amounts in each year remain unallocated. These amounts have been notionally allocated to all

states on an equal per capita basis.

These projects improve the safety of road sites that have been identified as high-risk

areas for serious crashes. Funding is aimed at improving sites that have a record of at

least three accidents involving casualties over a five-year period and can demonstrate a

benefit-to-cost ratio greater than two.

A new measure associated with this component of the Infrastructure Investment

Program is listed in Table 1.4 and described in more detail in Budget Paper No. 2,

Budget Measures 2019-20.

Budget Paper No. 3

46

Bridges Renewal Program(a)


2018-19 34.8 9.2 22.8 8.3 2.9 3.4 1.2 2.3 85.0

2019-20 38.7 17.6 31.1 11.9 7.6 4.2 1.5 8.9 121.3

2020-21 45.3 21.8 21.4 7.7 5.2 1.6 1.3 0.7 105.0

2021-22 34.7 28.7 21.7 11.0 7.3 2.2 1.9 1.0 108.5



The Australian Government is providing funding to upgrade bridges across the nation.

This program renews and replaces bridges serving local communities and facilitates

higher productivity vehicle access.




Developing Northern Australia — Improving Cattle Supply Chains(a)


2018-19 - - 27.5 4.0 - - - 11.1 42.6

2019-20 - - 24.6 8.7 - - - 17.8 51.1

2020-21 - - 0.7 - - - - - 0.7

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - (a) Some amounts in each year remain unallocated. These amounts have been notionally allocated to the

relevant states on an equal per capita basis.

The Australian Government is providing funding to Queensland, Western Australia

and the Northern Territory for road infrastructure projects that will improve the

resilience and productivity of the northern cattle supply chains.

Developing Northern Australia — Northern Australia Roads(a)


2018-19 - - 46.0 55.3 - - - 54.5 155.7

2019-20 - - 71.7 47.7 - - - 91.2 210.5

2020-21 - - 57.9 19.6 - - - 38.5 116.0

2021-22 - - 14.7 4.6 - - - - 19.3

2022-23 - - - - - - - - - (a) Some amounts in each year remain unallocated. These amounts have been notionally allocated to the

relevant states on an equal per capita basis.

The Australian Government is providing funding to Queensland, Western Australia

and the Northern Territory for infrastructure projects that are essential to the

movement of people and freight in order to support economic development in the

region. Projects include links to roads connecting communities and regional towns to

ports and airports.


47

Heavy Vehicle Safety and Productivity Program(a)


2018-19 31.2 7.6 8.1 2.2 2.7 0.6 - 7.6 60.0

2019-20 35.9 12.3 24.4 8.2 7.6 1.1 0.4 5.0 95.0

2020-21 25.7 11.1 16.5 9.8 2.3 2.0 0.4 2.2 70.0

2021-22 37.3 11.9 23.8 8.7 2.3 2.2 0.6 0.3 87.2



The Australian Government is contributing to the safety and productivity of heavy

vehicles by funding projects that improve the safety of the road environment, enhance

the capacity of existing roads and improve connections to freight networks.




Major Projects Business Case Fund(a)


2018-19 - 5.0 5.0 - - - - - 10.0

2019-20 8.0 13.0 14.0 5.0 - - - - 40.0

2020-21 8.0 8.0 24.0 10.0 - - - - 50.0

2021-22 5.0 .. 5.0 5.0 - .. .. - 15.0

2022-23 3.0 4.8 11.6 5.3 0.2 0.1 0.1 .. 25.0 (a) Some amounts in each year remain unallocated. These amounts have been notionally allocated to all


The Australian Government is providing funding to support the development of

business cases for road and rail infrastructure projects. Funding will support a range of

scenarios relating to business case development, including supporting joint state,

territory and Australian Government planning processes.

National Rail Program


2018-19 27.0 - 2.0 2.0 115.0 - - - 146.0

2019-20 33.0 15.0 48.0 40.0 95.0 - - - 231.0

2020-21 41.1 75.3 75.0 185.0 10.0 - - - 386.4

2021-22 172.2 135.0 90.0 247.5 - - - - 644.7

2022-23 659.9 280.0 135.0 290.0 - - - - 1,364.9

The Australian Government has established a national rail program to improve urban

and regional passenger services. This investment will reduce congestion in capital

cities, revitalise regional economies and provide families and businesses with more

affordable options on where to live and invest.

New measures associated with this component of the Infrastructure Investment

Program are listed in Table 1.4 and described in more detail in Budget Paper No. 2,


Budget Paper No. 3

48

Rail investment component


2018-19 - 469.4 17.8 34.4 20.3 13.2 - - 554.9

2019-20 - 427.1 - 75.1 30.0 15.0 - - 547.2

2020-21 - 311.9 - 60.5 3.9 15.0 - - 391.3

2021-22 - 248.7 - 316.7 - 45.0 - - 610.3

2022-23 - 285.1 - - - 53.0 - - 338.1

The rail investment component of the Infrastructure Investment Program delivers the

Australian Government’s rail investment outside the national rail program. It funds

projects across Australia, including the Victorian regional rail program.




Road investment component(a)


2018-19 1,028.6 216.2 1,221.8 575.9 494.6 87.3 1.0 39.0 3,664.4

2019-20 679.5 279.8 1,190.4 487.7 349.4 55.5 7.9 67.0 3,117.3

2020-21 687.2 384.8 1,574.7 380.9 185.0 69.6 17.2 77.5 3,376.8

2021-22 424.0 644.4 2,100.9 290.4 73.7 63.9 36.0 87.0 3,720.3

2022-23 439.7 1,243.4 1,821.1 610.3 248.9 197.2 56.0 158.3 4,774.8 (a) Some amounts in each year remain unallocated. These amounts have been notionally allocated to all


The road investment component of the Infrastructure Investment Program delivers the

majority of the Australian Government’s investment in road infrastructure. It targets

nationally significant projects that will improve the efficiency and safety of Australia’s

road network. Funding is provided for road construction projects and network

maintenance, as well as transport development, innovation projects and grants to land

transport research bodies.

New measures associated with this component of the Infrastructure Investment

Program are listed in Table 1.4 and described in more detail in Budget Paper No. 2,


Roads of Strategic Importance initiative(a)


2018-19 5.0 - 1.1 0.4 - 5.0 - 0.8 12.3

2019-20 15.0 - 14.7 15.4 - 15.8 - 9.9 70.8

2020-21 48.3 40.3 40.4 85.5 5.4 53.6 0.7 18.5 292.8

2021-22 53.4 43.1 84.2 116.0 6.5 71.4 0.8 25.2 400.5



The Australian Government is providing $4.5 billion in funding over 12 years to

upgrade key routes to improve access for businesses and communities to essential

services, markets and employment opportunities.


49




Roads to Recovery(a)


2018-19 98.3 68.8 84.2 58.3 29.3 10.4 5.0 10.2 364.5

2019-20 139.3 101.7 101.7 73.1 44.9 16.3 8.0 14.5 499.6

2020-21 139.3 101.7 101.7 73.1 44.9 16.3 8.0 14.5 499.6

2021-22 139.3 101.7 101.7 73.1 44.9 16.3 8.0 14.5 499.6

2022-23 139.3 101.7 101.7 73.1 44.9 16.3 8.0 14.5 499.6 (a) These figures include payments direct to local governments.

The Australian Government is providing funding for the roads to recovery program

for road construction and maintenance projects at a local level. Decisions on projects to

be funded are made locally and reported to the Australian Government.




Urban Congestion Fund(a)


2018-19 10.5 10.7 9.9 3.9 3.9 1.0 .. .. 40.0

2019-20 207.0 186.1 161.8 70.9 67.4 16.2 6.6 3.8 720.0

2020-21 165.7 157.7 158.8 83.4 123.9 23.5 4.5 2.5 720.0

2021-22 156.0 171.4 172.2 54.6 146.5 12.9 4.1 2.3 720.0



The Urban Congestion Fund supports projects to remediate pinch points, improve

traffic safety and flow and increase network efficiency for commuter and freight

movements in major urban areas.




Infrastructure Growth Package

The Australian Government announced the Infrastructure Growth Package,

comprising the Asset Recycling Initiative, New Investments, and the Western Sydney

Infrastructure Plan, in the 2014–15 Budget.

Budget Paper No. 3

50

Asset Recycling Initiative


2018-19 335.2 - - - - - 44.4 40.4 420.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

Under the Asset Recycling Initiative, the Australian Government is providing funding

to encourage states to divest assets and reinvest the proceeds into new productive

infrastructure. States are required to complete all asset divestments and commence

construction on agreed projects by 30 June 2019.

New investments


2018-19 14.2 3.8 7.4 0.7 63.4 0.7 - 15.1 105.4

2019-20 37.0 2.7 1.1 3.2 2.7 - - 5.7 52.4

2020-21 3.6 0.5 - - - - - - 4.1

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing additional funding to expedite investment in

high-quality economic infrastructure. This includes additional funding for significant

road projects and the National Highway Upgrade Program.

Western Sydney Infrastructure Plan


2018-19 195.9 - - - - - - - 195.9

2019-20 485.8 - - - - - - - 485.8

2020-21 428.7 - - - - - - - 428.7

2021-22 220.1 - - - - - - - 220.1

2022-23 270.0 - - - - - - - 270.0

The Australian Government is providing $2.9 billion over 10 years to enhance capacity

and improve transport infrastructure in Sydney’s western suburbs. This includes

infrastructure to support the new Western Sydney airport at Badgerys Creek.

Other National Partnership payments

Adelaide City Deal


2018-19 - - - - - - - - -

2019-20 - - - - 4.0 - - - 4.0

2020-21 - - - - 10.0 - - - 10.0

2021-22 - - - - 27.0 - - - 27.0

2022-23 - - - - 23.0 - - - 23.0


51

The Australian Government will provide funding to support projects under the

Adelaide City Deal, including the development of a new innovation and cultural

precinct in the city centre.

A new measure associated with this city deal is listed in Table 1.4 and described in

more detail in Budget Paper No. 2, Budget Measures 2019-20.

Albury Wodonga Regional Deal


2018-19 - - - - - - - - -

2019-20 1.6 1.6 - - - - - - 3.2

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government will provide funding to support an Albury Wodonga

Regional Deal.

A new measure associated with this regional deal is listed in Table 1.4 and described in


Barkly Regional Deal


2018-19 - - - - - - - - -

2019-20 - - - - - - - 5.7 5.7

2020-21 - - - - - - - 9.8 9.8

2021-22 - - - - - - - 6.9 6.9

2022-23 - - - - - - - - -

The Australian Government will provide funding to deliver a range of economic,

social and cultural initiatives in the Barkly region.



Darwin City Deal


2018-19 - - - - - - - - -

2019-20 - - - - - - - 2.3 2.3

2020-21 - - - - - - - 5.0 5.0

2021-22 - - - - - - - 10.0 10.0

2022-23 - - - - - - - 15.0 15.0


Darwin City Deal, including an education and civic precinct in Darwin’s city centre.

Budget Paper No. 3

52

Drought Communities Program


2018-19 46.1 5.1 25.0 - 17.0 - - - 93.2

2019-20 7.0 1.0 - - 5.0 2.0 - - 15.0

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is supporting local infrastructure projects that provide

employment for people whose work opportunities have been affected by drought.

Funding will be provided to local government areas for projects that stimulate local

community spending, use local resources, businesses and suppliers, and provide

long-lasting benefits to communities and the agricultural industries on which they

depend.

A new measure associated with this program is listed in Table 1.4 and described in


Geelong City Deal


2018-19 - 4.6 - - - - - - 4.6

2019-20 - 26.5 - - - - - - 26.5

2020-21 - 52.2 - - - - - - 52.2

2021-22 - 56.6 - - - - - - 56.6

2022-23 - 32.7 - - - - - - 32.7


Geelong City Deal, including the Shipwreck Coast Master Plan, Great Ocean Road

projects and projects in the Geelong city centre.

A new measure associated with this city deal is listed in Table 1.4 and described in


Hinkler Regional Deal


2018-19 - - - - - - - - -

2019-20 - - 11.0 - - - - - 11.0

2020-21 - - 15.0 - - - - - 15.0

2021-22 - - 20.0 - - - - - 20.0

2022-23 - - 25.0 - - - - - 25.0

The Australian Government will provide funding to support projects in the

Hinkler region.




53

Interstate Road Transport(a)


2018-19 ~ ~ ~ ~ ~ ~ ~ ~ 6.4

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - (a) The scheme ceased on 30 June 2018 with residual amounts continuing until 30 September 2018.

The Australian Government provided funding under the Interstate Road Transport

Act 1985 equal to the total revenue received from heavy vehicle registrations under the

Federal Interstate Registration Scheme. The legislation for this was repealed and the

scheme ceased on 30 June 2018.

Launceston City Deal


2018-19 - - - - - - - - -

2019-20 - - - - - 8.8 - - 8.8

2020-21 - - - - - 8.8 - - 8.8

2021-22 - - - - - 10.3 - - 10.3

2022-23 - - - - - 14.2 - - 14.2

The Australian Government will provide $47.5 million over five years from 2019-20

towards 12 projects to reduce pollution and improve the health of the Tamar River in

Tasmania, as part of the Launceston City Deal.

Murray-Darling Basin Regional Economic Diversification Program


2018-19 12.6 3.2 1.9 - - - - - 17.6

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to basin states to support economic

diversification in regional communities likely to be affected by the implementation of

the Murray Darling Basin Plan. Projects seek to encourage sustainable economic

development through joint government, private and community sector investment.

Budget Paper No. 3

54

Townsville City Deal


2018-19 - - 5.0 - - - - - 5.0

2019-20 - - 55.0 - - - - - 55.0

2020-21 - - 140.0 - - - - - 140.0

2021-22 - - 50.0 - - - - - 50.0

2022-23 - - 20.0 - - - - - 20.0


Townsville City Deal, including stage two of the Haughton pipeline and the port of

Townsville channel capacity upgrade.

Western Sydney City Deal


2018-19 7.8 - - - - - - - 7.8

2019-20 32.3 - - - - - - - 32.3

2020-21 30.0 - - - - - - - 30.0

2021-22 5.0 - - - - - - - 5.0

2022-23 - - - - - - - - - The Australian Government is providing funding under the Western Sydney City Deal

to deliver improved community facilities and urban amenities, and to cut development

costs and boost housing supply.

This is in addition to funding of $3.5 billion for transport infrastructure in

Western Sydney, listed in Table 1.4 and described in more detail in Budget Paper

No. 2, Budget Measures 2019-20.

WiFi and Mobile Coverage on Trains


2018-19 8.0 - - - - - - - 8.0

2019-20 2.0 - - - - - - - 2.0

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

This program will establish mobile and internet connectivity along the train route

between Hornsby and Wyong.


55

ENVIRONMENT

In 2019–20, the Australian Government will provide funding of $384.4 million to

support state environment projects, as detailed in Table 2.9.

Table 2.9: Payments to support state environment services

$million 2018-19 2019-20 2020-21 2021-22 2022-23


Assistance for pest animal and weed

management in drought-affected areas 2.0 - - - -

Development of business cases for constraints

measures and potential implementation 10.0 20.0 40.0 40.5 50.0

Disaster risk reduction - 20.9 20.9 20.9 20.9

Environmental management of the former

Rum Jungle mine site 2.5 5.3 - - -

Grants assistance to primary producers

impacted by the north Queensland floods 300.0 - - - -

Great Artesian Basin sustainability initiative 2.5 10.0 6.0 6.0 8.0

Hydrogen energy supply chain pilot project 10.0 17.5 12.5 - -

Implementation of the national insurance

affordability initiative 5.0 - - - -

Implementing water reform in the

Murray-Darling Basin 20.0 20.0 - - -

Management of established pest animals

and weeds 7.2 1.0 1.0 1.0 1.0

Marinus Link 56.0 - - - -

Mechanical fuel load reduction trials 0.5 - - - -

Murray-Darling basin water infrastructure

program - 0.8 15.4 13.2 -

National fire danger rating system 0.2 - - - -

National forestry industry plan - - 1.8 1.8 -

National Water Infrastructure Development Fund

Feasibility studies 22.9 15.2 10.0 5.0 -

Capital 90.1 128.2 150.0 185.0 230.0

Natural disaster resilience 15.1 - - - -

On-farm emergency water infrastructure

rebate 19.9 19.7 9.7 - -

Pest and disease preparedness and

response programs 63.0 38.0 38.9 31.7 37.0

Prepared communities 5.0 - - - -

Preparing Australia package 9.4 - - - -

South Australian River Murray sustainability

program

Irrigation efficiency and water purchase 24.0 - - - -

Irrigation industry assistance 7.5 - - - -

Sustainable rural water use and

infrastructure Program 287.9 75.3 141.7 40.0 60.0

World Heritage sites 9.5 9.5 9.5 9.5 9.5

Yellow crazy ant control - 3.0 3.0 3.0 -

Total 970.2 384.4 460.3 357.5 416.4

Budget Paper No. 3

56

National Partnership payments for the environment

National Partnership on assistance for pest animal and weed management in drought-affected areas


2018-19 0.5 - 1.0 0.3 0.3 - - - 2.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is assisting drought-affected farm businesses with the

installation of water-related infrastructure as well as managing the impacts of pest

animals and weeds.

National Partnership on the development of business cases for constraints measures and potential implementation

(a)


2018-19 ~ ~ ~ ~ ~ ~ ~ ~ 10.0

2019-20 ~ ~ ~ ~ ~ ~ ~ ~ 20.0

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 40.0

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 40.5

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 50.0 (a) State allocations from 2018–19 have not yet been determined. Arrangements for the implementation

program for constraints measures are yet to be agreed.

The Australian Government supports the development of business cases for proposals

to ease or remove constraints to the delivery of water to the environmental assets of

the Murray-Darling basin.

National Partnership on disaster risk reduction(a)


2018-19 - - - - - - - - -

2019-20 ~ ~ ~ ~ ~ ~ ~ ~ 20.9

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 20.9

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 20.9

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 20.9 (a) State allocations from 2019-20 have not yet been determined.

The Australian Government is providing funding to the states to reduce the risk and

impact of disasters on Australians in line with the priorities of the National Disaster

Risk Reduction Framework. The funding forms part of a broader $130.5 million

package over five years from 2019-20 to support resilience to disasters triggered by

natural hazards.




57

National Partnership on the environmental management of the former Rum Jungle mine site


2018-19 - - - - - - - 2.5 2.5

2019-20 - - - - - - - 5.3 5.3

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is continuing to fund the program of work established to

improve the management of the Rum Jungle mine site and to further develop a

rehabilitation strategy, in partnership with stakeholders, including the site’s

traditional owners.

National Partnership on grants assistance to primary producers impacted by the north Queensland floods


2018-19 - - 300.0 - - - - - 300.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government will provide funding to assist primary producers

impacted by the north and far north Queensland monsoon trough (25 January —

14 February 2019) to rebuild their farm enterprises through grants to purchase on-farm

infrastructure and to restock or replant.



National Partnership on the Great Artesian Basin sustainability initiative(a)


2018-19 ~ ~ 2.5 ~ ~ ~ ~ ~ 2.5

2019-20 ~ ~ 6.4 ~ ~ ~ ~ ~ 10.0

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 6.0

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 6.0

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 8.0 (a) State allocations have not yet been determined.

The Australian Government provides funding to continue the capping of uncontrolled

bores and piping open bore drains to reduce water loss and recover

groundwater pressure.

Budget Paper No. 3

58

National Partnership on the hydrogen energy supply chain pilot project


2018-19 - 10.0 - - - - - - 10.0

2019-20 - 17.5 - - - - - - 17.5

2020-21 - 12.5 - - - - - - 12.5

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is supporting a pilot project to demonstrate the feasibility

of a hydrogen energy supply chain (HESC) based on gasification of brown coal to

produce liquid hydrogen for use in Japan. The pilot will inform the commercial

viability of a long-term HESC from Australia to Japan.

National Partnership on the implementation of the national insurance affordability initiative


2018-19 - - 5.0 - - - - - 5.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is funding the construction of a flood levee in Roma and

improving flood defences in Ipswich to reduce flood risk and insurance premiums.

National Partnership on implementing water reform in the Murray-Darling basin


2018-19 9.4 6.8 2.0 - 1.5 - 0.3 - 20.0

2019-20 9.4 6.8 2.0 - 1.5 - 0.3 - 20.0

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is supporting the cooperative implementation of the

Intergovernmental Agreement on Implementing Water Reform in the Murray-Darling

Basin. The agreement aims to ensure continuing progress in restoring the

Murray-Darling basin’s rivers to health, securing strong regional communities, and

supporting sustainable food and fibre production.

National Partnership on the management of established pest animals and weeds


2018-19 1.1 1.6 2.0 1.0 0.8 0.2 .. 0.5 7.2

2019-20 - - 1.0 - - - - - 1.0

2020-21 - - 1.0 - - - - - 1.0

2021-22 - - 1.0 - - - - - 1.0

2022-23 - - 1.0 - - - - - 1.0


59

This program builds the skills and capacity of landholders, the community and

industry to manage established pest animals and weeds.

The Australian Government will provide separate funding to assist with management

of prickly acacia weeds as a result of the flood in Queensland.



National Partnership on the Marinus Link


2018-19 - - - - - 56.0 - - 56.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to support progress towards the

delivery of the definition and approvals phase of a second electricity transmission

interconnector from Tasmania to the mainland, the Marinus Link. This is required to

progress the project to a final investment decision.



National Partnership on mechanical fuel load reduction trials


2018-19 0.5 - - - - - - - 0.5

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

This program supports research into the effectiveness of mechanical fuel removal in

forests where conservation values could be compromised by burning.

National Partnership on Murray-Darling basin water infrastructure program


2018-19 - - - - - - - - -

2019-20 0.1 0.1 - - 0.4 - 0.2 - 0.8

2020-21 0.3 4.2 - - 0.4 - 10.5 - 15.4

2021-22 - 3.2 - - - - 10.0 - 13.2

2022-23 - - - - - - - - -

The Australian Government will provide funding for state-led efficiency measures

under the Water for the Environment Special Account in the Murray-Darling basin.

This will contribute to 450GL of additional water for the environment.

Budget Paper No. 3

60

National Partnership on a national fire danger rating system


2018-19 - - - - 0.2 - - - 0.2

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding to develop a prototype national fire

danger rating system and associated social research to assist the states in

communicating fire danger information to the public.

National Partnership on the national forestry industry plan(a)


2018-19 - - - - - - - - -

2019-20 - - - - - - - - -

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 1.8

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 1.8

2022-23 - - - - - - - - - (a) State allocations have not yet been determined.

The Australian Government will support the states to offer advice on the establishment

of new farm forestry assets, private native forestry and Indigenous forestry areas’

suitability for sustainable harvesting of forest products.

National Partnership on the National Water Infrastructure Development Fund

This program facilitates long-term economic and regional development by enhancing

the knowledge base underpinning water infrastructure planning and decision-making,

undertaking the detailed planning required to inform water infrastructure investment

decisions and expediting the construction of water infrastructure.

Feasibility studies component(a)


2018-19 ~ ~ ~ ~ ~ ~ ~ ~ 22.9

2019-20 ~ ~ ~ ~ ~ ~ ~ ~ 15.2

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 10.0

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 5.0

2022-23 - - - - - - - - - (a) State allocations have not yet been determined.

The Australian Government provides funding to support delivery of feasibility studies

that inform investment decisions on water infrastructure.


61

Capital component(a)


2018-19 ~ ~ ~ ~ ~ ~ ~ ~ 90.1

2019-20 ~ ~ ~ ~ ~ ~ ~ ~ 128.2

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 150.0

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 185.0

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 230.0 (a) State allocations have not yet been determined.

The Australian Government provides funding to partially fund the capital construction

costs of a small number of high-priority water infrastructure projects.



National Partnership on natural disaster resilience


2018-19 6.8 - - 6.3 2.1 - - - 15.1

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing the states with funding to strengthen

community resilience and minimise the impact of a range of natural disasters

in Australia.

The National Partnership is a joint funding arrangement that provides the flexibility

for states to address their specific natural disaster risk priorities. This arrangement

recognises that the Australian Government and the states have a mutual interest in

reducing the impact of, and increasing resilience to, natural disasters.

National Partnership for on-farm emergency water infrastructure rebate


2018-19 5.0 2.0 6.0 1.6 2.0 ~ 0.8 1.0 19.9

2019-20 5.0 2.0 6.0 1.4 2.0 ~ 0.8 1.0 19.7

2020-21 2.0 1.0 2.0 1.6 1.0 ~ 0.8 1.0 9.7

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

This Australian Government will provide funding for one-off rebates to eligible

primary producers to improve water infrastructure that addresses animal welfare and

improves drought resilience for primary producers.

Budget Paper No. 3

62

National Partnership on pest and disease preparedness and response programs

(a)


2018-19 0.4 0.8 51.2 2.4 0.1 - - 8.1 63.0

2019-20 0.3 0.4 35.3 1.0 0.1 - - 1.0 38.0

2020-21 0.3 0.4 36.1 1.0 0.1 - - 1.0 38.9

2021-22 0.3 0.4 29.0 1.0 0.1 - - 1.0 31.7

2022-23 0.3 0.4 34.3 1.0 0.1 - - 1.0 37.0 (a) State allocations are indicative estimates only. Funding is conditional on agreed national responses to

pest or disease incursions.

This program contributes to the eradication of exotic animal, plant and environment

pests and diseases which, if allowed to establish themselves and spread, would have

serious economic and environmental impacts. The Australian Government is involved

owing to the potential implications for biodiversity, market access issues for

agricultural products and the need to protect nationally significant

environmental assets.



National Partnerships on prepared communities


2018-19 1.3 0.8 1.2 0.6 0.4 0.3 0.3 0.3 5.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government provides funding to deliver on high priority state

initiatives to improve community preparedness for, and resilience to, disasters.

National Partnerships on the Preparing Australia package


2018-19 7.4 2.0 - - - - - - 9.4

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government will provide funding to invest in critical emergency

management capabilities under the Preparing Australia package to enhance Australia’s

natural disaster preparedness and community resilience.

National Partnership on the South Australian River Murray sustainability program

The three components of this National Partnership support the Murray-Darling basin

water reforms by contributing to a healthy working river system, strong communities


63

and sustainable food and fibre production, while providing certainty for affected

communities and water users.

Irrigation efficiency and water purchase components


2018-19 - - - - 24.0 - - - 24.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding for South Australia to deliver a

grants program to support more efficient delivery and use of water by irrigation water

providers and irrigators. The program also enables South Australian irrigators to sell

their water entitlements to the South Australian Government for return to the

environment. In total, these two components aim to return 36 gigalitres (the long-term

average annual yield) of ‘gap bridging’ water to the Australian Government.

Irrigation industry assistance component


2018-19 - - - - 7.5 - - - 7.5

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government is providing funding for South Australia to deliver a

grants program to improve the productivity of the South Australian River Murray

irrigation industry.

Sustainable rural water use and infrastructure program


2018-19 75.4 123.8 13.7 - 38.0 21.2 15.9 - 287.9

2019-20 45.1 20.7 - - 8.8 - 0.6 - 75.3

2020-21 71.8 61.0 - - 8.3 - 0.7 - 141.7

2021-22 35.0 4.1 - - 0.8 - - - 40.0

2022-23 55.0 4.1 - - 0.8 - - - 60.0

The Australian Government is providing funding for this program under a number of

arrangements, including the National Partnership on water for the future, water

management partnership agreements under the Intergovernmental Agreement on

Murray-Darling Basin Reform 2008, the Intergovernmental Agreement on

Implementing Water Reform in the MurrayDarling Basin 2013, and Project

Agreements outside of the Murray-Darling basin.

The program funds most of the water recovery to ‘bridge the gap’ under the

Murray-Darling basin plan. It also aims to improve the efficiency and productivity of

rural water management and usage, deliver substantial and lasting water returns to

Budget Paper No. 3

64

the environment, secure a long-term sustainable future for irrigated agriculture, and

improve the health of wetlands and freshwater ecosystems.

National Partnership on World Heritage sites


2018-19 0.8 - 3.1 0.4 0.1 5.1 - - 9.5

2019-20 0.8 - 3.1 0.4 0.1 5.1 - - 9.5

2020-21 0.8 - 3.1 0.4 0.1 5.1 - - 9.5

2021-22 0.8 - 3.1 0.4 0.1 5.1 - - 9.5

2022-23 0.8 - 3.1 0.4 0.1 5.1 - - 9.5

The Australian Government provides funding to assist addressing critical threats such

as feral animals and weeds, and changed fire regimes, to conserve and restore the

biodiversity of World Heritage sites.

National Partnership on yellow crazy ant control


2018-19 - - - - - - - - -

2019-20 - - 3.0 - - - - - 3.0

2020-21 - - 3.0 - - - - - 3.0

2021-22 - - 3.0 - - - - - 3.0

2022-23 - - - - - - - - -

The Australian Government will provide funding to ensure a more concerted

approach to yellow crazy ant control activities in and adjacent to the Wet Tropics of

Queensland World Heritage Area.




65

CONTINGENT PAYMENTS

Contingent payments arise where the Australian Government has committed to

provide compensation when an event occurs or has otherwise guaranteed a state’s

financial position. Payments to the states will only arise if the relevant event occurs.

Table 2.10: Contingent payments to the states

$million 2018-19 2019-20 2020-21 2021-22 2022-23


Disaster Recovery Funding Arrangements 475.0 11.0 1.8 .. -

Hepatitis C settlement fund 0.2 0.2 0.2 0.2 0.2

Total 475.1 11.2 2.0 0.2 0.2 Disaster Recovery Funding Arrangements — expense estimates


2018-19 0.6 2.6 462.4 3.9 0.1 4.0 - 1.4 475.0

2019-20 .. .. 7.8 2.5 - 0.2 - 0.5 11.0

2020-21 - .. 1.8 - - .. - - 1.8

2021-22 - - - - - .. - - ..

2022-23 - - - - - - - - -

The Australian Government provides funding under the Disaster Recovery Funding

Arrangements (DRFA) to assist the states in relief and recovery efforts following

natural disasters.

The Australian Government recognises a liability equal to the present value of future

payments expected to be made to the states under the DRFA. This is regardless of

whether a state has completed relevant reconstruction work or submitted a claim to

the Australian Government.

The estimated expenses in the table above reflect expected Australian Government

costs associated with disasters that have occurred in 2018-19, the unwinding of the

discount on the provision, and any change in the discount rate.

Estimated payments to the states in response to recent natural disasters include: the Bega Valley and Eurobodalla bushfires in New South Wales in August 2018; and tropical cyclones impacting Western Australia in January and February 2018 and Queensland and the Northern Territory in March 2018. Payments are also being made in relation to severe weather events (including storms and flooding) that impacted Western Australia in January 2017, Tasmania in May 2018 and Queensland in February 2018 and January 2019.

Current estimates for the DRFA are based on the information available at the time of preparation. Preliminary estimates of the cost of a disaster and the timing of expenditure are subject to change. The total cost of relief and recovery from these events may not be completely realised for some years. Estimates of all natural disasters are regularly reviewed and revised by the states as new information becomes available, and this, or the occurrence of future natural disasters, can significantly affect

Budget Paper No. 3

66

the estimated DRFA liability and payments. More information is available in Budget Paper No. 1, Statement 8: Statement of Risks 2019-20.

Disaster Recovery Funding Arrangements — cash estimates


2018-19 26.8 51.4 359.4 46.5 2.4 22.1 - 31.9 540.5

2019-20 1.2 1.6 365.9 148.6 - 12.4 - 27.7 557.5

2020-21 - 0.7 109.6 - - 1.2 - - 111.5

2021-22 - - - - - 0.5 - - 0.5

2022-23 - - - - - - - - -

Estimated cash payments for the DRFA illustrate when the Australian Government

expects to reimburse the states for costs incurred in relation to past disasters.



Hepatitis C settlement fund


2018-19 0.2 - - - - - - - 0.2

2019-20 0.2 - - - - - - - 0.2

2020-21 0.2 - - - - - - - 0.2

2021-22 0.2 - - - - - - - 0.2

2022-23 0.2 - - - - - - - 0.2

The Australian Government is contributing to out of court settlement costs for people

who contracted hepatitis C through the blood supply service between 1985 and 1991.


67

OTHER NATIONAL PARTNERSHIP PAYMENTS

The Australian Government makes payments to the states to support a range of other

services, as detailed in Table 2.11.

Table 2.11: Payments to support other state services

$million 2018-19 2019-20 2020-21 2021-22 2022-23


Financial assistance to local governments 2,504.0 1,275.0 2,655.8 2,764.4 2,883.0

Family advocacy and support services 7.0 9.7 - - -

Family law information sharing - 2.7 2.8 2.8 -

Financial assistance for police officers 2.9 4.6 5.1 2.2 0.4

Legal assistance services 265.9 270.0 - - -

National Mechanism for Commonwealth

legal assistance

Legal aid commissions - - 226.4 229.8 233.2

Community legal centres - - 45.4 52.7 53.5

Aboriginal and Torres Strait Islander

Legal Services - - 75.5 82.7 84.1

Domestic Violence Units and Health

Justice Partnerships - - 9.9 10.1 10.2

Expensive Commonwealth criminal cases - - 8.1 8.2 8.4

Family advocacy and support services - - 9.9 10.0 -

Support for legal assistance services - - 10.0 10.2 10.3

Social and Community Services Sector

supplementation - - 12.3 - -

North Queensland stadium 50.0 20.0 - - -

North Queensland strata title inspection

scheme 3.5 5.3 2.9 - -

Provision of fire services (a) 21.8 22.6 23.3 24.2 nfp

Sinking fund on state debt .. .. .. .. ..

Small business regulatory reform 129.4 107.5 63.2 - -

South Sydney Rabbitohs' Centre of Excellence 6.0 - - - -

Supplementary funding to South Australia

for local roads 60.0 - - - -

Total 3,050.5 1,717.4 3,150.5 3,197.2 3,283.2

Memorandum item – payments direct to local

governments included in payments above

Supplementary funding to South Australia

for local roads 60.0 - - - - (a) Funding amounts are not published for 2022-23 as negotiations are yet to be finalised.

Budget Paper No. 3

68

Financial assistance to local governments


2018-19

General purpose assistance 554.4 448.6 347.8 180.4 120.5 36.6 29.1 17.1 1,734.4

Local road component 223.3 158.7 144.2 117.7 42.3 40.8 24.7 18.0 769.6

Total 777.6 607.3 492.0 298.1 162.8 77.4 53.8 35.1 2,504.0

2019-20

General purpose assistance 282.2 229.0 177.2 91.4 61.1 18.6 14.9 8.6 883.1


Total 395.9 309.8 250.6 151.3 82.7 39.4 27.5 17.8 1,275.0

2020-21



Total 824.8 648.6 521.7 313.7 170.9 81.8 57.3 36.9 2,655.8

2021-22



Total 858.7 678.5 542.8 324.8 176.7 84.9 59.8 38.3 2,764.4

2022-23



Total 895.7 711.0 565.8 337.1 183.0 88.2 62.5 39.7 2,883.0

This program provides untied financial contributions to local governments to be spent

according to local priorities. In 2018-19, these financial contributions will total

$2.5 billion, recognising that $1.3 billion will be brought forward from 2019-20 to be

paid in 2018-19.

The Financial Assistance Grant program consists of two components: a general

purpose component and a local road component. The general purpose component is

the larger component and is distributed between the states on a per capita basis, while

the local road component is distributed between the states according to fixed

historical shares.

Funding under the Financial Assistance Grant program is paid through state

governments to local governments. State grants commissions determine the intrastate

distribution of the grants between local governments. Both funding components are

untied and can be spent according to each local government’s own priorities.

A new measure associated with this financial assistance is listed in Table 1.4 and


National Partnership on family advocacy and support services


2018-19 1.7 1.2 1.1 0.7 0.6 0.6 0.6 0.5 7.0

2019-20 2.3 1.6 1.4 1.0 0.8 1.0 0.7 0.8 9.7

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -


69

The Australian Government is supporting the operation of family advocacy and

support services by legal aid commissions. They are providing integrated duty lawyer

and family violence support services at locations across Australia.

National Partnership on family law information sharing(a)


2018-19 - - - - - - - - -

2019-20 ~ ~ ~ ~ ~ ~ ~ ~ 2.7

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 2.8

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 2.8

2022-23 - - - - - - - - - (a) State allocations from 2019-20 have not yet been determined.

The Australian Government will support the placement of state family safety officials

(such as child protection or policing officials) in the family law courts across Australia.

These co-located officials will facilitate information sharing between the family law,

child protection and family violence legal systems. They will also foster a more

coordinated response to safety issues, to promote the safety and wellbeing of families

and children.



National Partnership on financial assistance for police officers


2018-19 2.9 - - - - - - - 2.9

2019-20 4.6 - - - - - - - 4.6

2020-21 5.1 - - - - - - - 5.1

2021-22 2.2 - - - - - - - 2.2

2022-23 0.4 - - - - - - - 0.4

The Australian Government will provide transitional funding for the equal sharing of

the costs of reimbursing New South Wales police officers who incur an additional tax

liability from making voluntary superannuation contributions that exceed the

statutory cap on concessional contributions. Funding will cover liabilities incurred

from 2016-17 to 2019-20 with reimbursements made in arrears over a five year period.

The funding will also contribute to the cost-sharing of any fringe benefits tax that

results from reimbursing police officers in these situations.

National Partnership on legal assistance services


2018-19 78.8 61.1 53.3 31.3 20.3 7.5 6.0 7.5 265.9

2019-20 79.8 62.1 54.2 32.0 20.6 7.6 6.1 7.6 270.0

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government provides funding to the states for the provision of legal

assistance services to disadvantaged persons through legal aid commissions and

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70

community legal centres. The amounts in the table include funding for the Australian

Government’s share of wage increases arising from Fair Work Commission’s 2012

Equal Remuneration Order in the Social and Community Services sector.

From 2020-21, the Australian Government will deliver legal assistance funding to

states through the National Mechanism for Commonwealth legal assistance.

National Partnership on the National Mechanism for Commonwealth legal assistance

(a)


2018-19 - - - - - - - - -

2019-20 - - - - - - - - -

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 397.5

2021-22 ~ ~ ~ ~ ~ ~ ~ ~ 403.7

2022-23 ~ ~ ~ ~ ~ ~ ~ ~ 399.8 (a) State allocations from 2020-21 have not yet been determined.

Through the Legal Assistance Package, the Australian Government intends to create a

new, single National Mechanism for Commonwealth Legal Assistance Funding from

1 July 2020. The National Mechanism will integrate new and existing Commonwealth

legal assistance funding currently allocated across the Attorney General’s, Treasury

and Social Services portfolios.

Subject to negotiations, the National Mechanism will be a unified administrative

system that provides quarantined funding to legal aid commissions, community legal

centres and Aboriginal and Torres Strait Islander Legal Services, delivered via the

states and territories.



National Partnership on the North Queensland stadium


2018-19 - - 50.0 - - - - - 50.0

2019-20 - - 20.0 - - - - - 20.0

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - The Australian Government is supporting the delivery of the North Queensland

stadium, including site master planning and services infrastructure within the stadium

site to allow for a future entertainment centre. This project is included in the

Townsville city deal.


71

National Partnership on the North Queensland strata title inspection scheme


2018-19 - - 3.5 - - - - - 3.5

2019-20 - - 5.3 - - - - - 5.3

2020-21 - - 2.9 - - - - - 2.9

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

This scheme will improve the information available to owners of strata title properties

about a property’s susceptibility to weather damage and ways to make properties

more resilient. The Queensland Government will develop and administer the

assessment program for strata properties in North Queensland.

National Partnership on provision of fire services(a)


2018-19 4.8 3.4 3.3 1.5 1.2 0.3 5.2 2.2 21.8

2019-20 5.0 3.5 3.4 1.6 1.2 0.3 5.3 2.3 22.6

2020-21 5.2 3.6 3.5 1.6 1.2 0.3 5.5 2.3 23.3

2021-22 5.3 3.7 3.6 1.7 1.3 0.4 5.7 2.4 24.2

2022-23 nfp nfp nfp nfp nfp nfp nfp nfp nfp (a) Funding amounts are not published for 2022-23 as negotiations are yet to be finalised.

The Australian Government contributes to the provision of standard fire services to

Australian Government-owned property in the states.

Sinking fund on state debt


2018-19 .. .. - - - - - - ..

2019-20 .. .. - - - - - - ..

2020-21 .. .. - - - - - - ..

2021-22 .. .. - - - - - - ..

2022-23 .. .. - - - - - - ..

The Australian Government is contributing to the Debt Retirement Reserve Trust

Account on behalf of New South Wales and Victoria in accordance with the Financial

Agreement Act 1994. Monies standing to the credit of the account are applied to

repurchase state debt that is governed by this legislation.

National Partnership on small business regulatory reform(a)


2018-19 ~ ~ ~ ~ ~ ~ ~ ~ 129.4

2019-20 ~ ~ ~ ~ ~ ~ ~ ~ 107.5

2020-21 ~ ~ ~ ~ ~ ~ ~ ~ 63.2

2021-22 - - - - - - - - -

2022-23 - - - - - - - - - (a) State allocations are yet to be finalised.

The Australian Government provides funding to deliver reforms that drive Australia’s

economic performance, including reforms that reduce the regulatory burden on small

businesses.

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National Partnership on the South Sydney Rabbitohs’ Centre of Excellence


2018-19 6.0 - - - - - - - 6.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

This program supports the centre of excellence, which houses a community and

administration centre, as well as a football development department with elite

facilities.

Supplementary funding to South Australia for local roads


2018-19 - - - - 60.0 - - - 60.0

2019-20 - - - - - - - - -

2020-21 - - - - - - - - -

2021-22 - - - - - - - - -

2022-23 - - - - - - - - -

The Australian Government provides supplementary funding to South Australia for

local roads. South Australia will receive $60 million for this purpose in 2018–19.

A new measure associated with this supplementary funding is listed in Table 1.4 and


73

PART 3: GENERAL REVENUE ASSISTANCE

OVERVIEW

General revenue assistance is provided to the states without conditions, to spend

according to their own budget priorities. The main form of general revenue assistance

is the GST entitlement. Other general revenue assistance includes payments in relation

to municipal services in the Australian Capital Territory, royalties, Snowy Hydro

Limited tax compensation, and transitional GST top-up payments.

The Australian Government has taken action to grow the GST pool for the states, and

ensure a fairer distribution. Since the 2015-16 Budget, the Australian Government has

introduced new GST revenue measures that have increased the GST entitlements for

the states by about $9.6 billion over the four years to 2022-23. Many of these were

compliance and integrity measures, such as extending the GST compliance program

for four years and applying GST to digital products and services imported by

consumers.

In addition to these measures, the Australian Government has also reformed the

system of horizontal fiscal equalisation (HFE) to provide a fairer and more sustainable

way to distribute the GST among the states. From 2021-22, the system will transition to

a more stable and predictable equalisation standard that will reduce volatility in states’

GST payments. To support the states’ transition to this new system, the Australian

Government is also providing transitional GST top-up payments to the states, which is

expected to provide an additional $2.3 billion in GST support to the states up

to 2021-22. As was noted when the reforms were legislated in 2018, the reforms are

expected to deliver an additional $9 billion in extra untied funding to the states over

the first ten years to 2028-29, and an additional $1 billion per year in perpetuity once

fully implemented in 2026-27 (see Table 5 in the Productivity Commission inquiry into

horizontal fiscal equalisation: Government interim response). Further detail on the new GST

system can be found in Box 3.1.

Overall, the Government’s action has supported significant growth in the GST pool for

the states. The states’ GST entitlements are estimated to increase every year over the

forward estimates and reach $78 billion by 2022-23. This represents a 62 per cent

increase on the states’ entitlements since 2012-13, and a 220 per cent increase on the

entitlements since the GST was introduced in 2000-01 (Chart 3.1).

Budget Paper No. 3

74

Chart 3.1: Growth in the states’ GST entitlements

0

10

20

30

40

50

60

70

80

90

0

10

20

30

40

50

60

70

80

90

2000-01 2003-04 2006-07 2009-10 2012-13 2015-16 2018-19 2021-22

$billion$billion

Forw ard estimates

In 2019–20, the states are expected to receive $69.1 billion from the Australian

Government in total general revenue assistance — $67.2 billion for the GST entitlement

and $1.9 billion for other general revenue assistance. The GST entitlement represents

a 2.4 per cent increase on the $65.6 billion the states are expected to receive in 2018–19.

Total general revenue assistance to the states is estimated to represent 13.8 per cent of

total Australian Government expenditure in 2019–20.

Estimated total general revenue assistance provided to the states by the Australian

Government is shown in Table 3.1. Table 3.2 shows a breakdown by state for 2018-19

and 2019–20.

Table 3.1: General revenue assistance

$million 2018-19 2019-20 2020-21 2021-22 2022-23

GST entitlement 65,630.0 67,200.0 70,010.0 74,130.0 78,021.5

Other payments

ACT municipal services 40.1 40.7 41.4 42.0 42.7

Compensation for reduced royalties 34.4 32.6 29.2 25.9 22.9

Royalty payments 920.5 713.7 619.6 575.9 520.9

Snowy Hydro Limited tax compensation 75.0 - - - -

Transitional GST top-up payments(a) 434.0 1,066.3 556.1 292.9 -

Total other payments 1,504.0 1,853.3 1,246.3 936.6 586.5

Total 67,134.0 69,053.3 71,256.3 75,066.6 78,608.0 (a) The Government will pay Western Australia $434 million of its 2019-20 top-up payment in 2018-19.

Estimates beyond 2019-20 reflect the forecast GST relativities presented in the final report of the Productivity Commission Inquiry into Horizontal Fiscal Equalisation, and the Government’s interim response.

Part 3: General revenue assistance

75

Table 3.2: General revenue assistance by state(a)


2018-19 18,002.6 16,834.6 14,440.8 3,684.3 6,715.7 2,448.8 1,348.1 2,738.6 67,134.0

2019-20 18,713.8 17,265.9 14,213.6 4,428.1 6,759.0 2,475.3 1,450.8 3,033.1 69,053.3 (a) State splits for royalty payments are not published due to commercial sensitivities. Therefore, total

general revenue assistance will not equal the sum of the state splits above.

Box 3.1: A new and fairer GST distribution system

The Australian Government has reformed Australia’s system of horizontal fiscal equalisation to provide a fairer and more sustainable way to distribute the GST among the states. Legislation was passed by the Parliament in 2018.

From 2021-22, the system will progressively transition over six years to a more stable and predictable equalisation standard, based on the fiscal capacity of the stronger of New South Wales or Victoria. This change will reduce volatility in states’ GST payments, making it more predictable for the states and easier for them to manage their budgets.

During the transition phase, the Australian Government has guaranteed that each state will get the cumulative better of the old or the new system. From 2022-23, the horizontal fiscal equalisation system will also include a relativity floor of 0.7, permanently increasing to 0.75 in 2024-25.

As part of these reforms, the Australian Government is also boosting the GST pool to be distributed among the states each year with additional funding. In 2021-22, the Australian Government will inject $600 million into the GST pool, followed by a further $250 million in 2024-25, with both of these amounts to grow each and every year in line with the underlying growth of the GST.

To support the states transition to this new system, the Australian Government is also providing short-term top-up payments, until 2021-22, to ensure that no state has an effective relativity below 0.7 (or 4.66024 for the Northern Territory).

As was noted when these reforms were legislated in 2018, all states are expected to be better off under these new arrangements.

Further detail on the GST payments and the top-up payments can be found under ‘GST Payments’ and ‘Other General Revenue Assistance’ respectively below.

GST payments

Under the Federal Financial Relations Act 2009, the states are entitled to receive

payments from the Australian Government equivalent to the revenue raised from the

GST in any given financial year, subject to some minor adjustments, as discussed

below. From 2021-22, the states’ GST entitlements will also be boosted each year by

additional Australian Government funding, as discussed below.

The Australian Government makes monthly payments (advances) to the states

throughout the year based on GST estimates for that year. Estimates of the GST are

Budget Paper No. 3

76

used, as the actual amount of GST revenue for the financial year is unknown until after

the end of the financial year. Once the amount of GST revenue is known, the Treasurer

makes a determination of the GST entitlement for that year. A balancing adjustment

payment is then made to each state to ensure the states receive the GST to which they

are entitled. These balancing adjustments (referred to as the ‘prior year balancing

adjustment’) are made in the following financial year.

States compensate the Australian Government for the agreed costs incurred by the

Australian Taxation Office (ATO) in administering the GST. In practice, this is

achieved by the Australian Government reducing the monthly GST payments to the

states by the GST administration costs.

Calculating the GST payments

Some adjustments and additions are made to GST revenue in order to calculate the

amount of GST paid to the states in any given year, described below.

• Some GST revenue accrued during a financial year is not remitted to the ATO by

30 June of that year because it is not due to be paid until Business Activity

Statements (BAS) are lodged the following financial year.

• Penalties owed to the ATO, other than general interest charge (GIC) penalties, are

not included in the GST to be paid to the states, as defined in the Federal Financial

Relations Act 2009.

• Some GST collected by Australian Government agencies is not remitted to the ATO

by 30 June in each financial year because it is not due to be paid until the next BAS

is lodged.

• From 2021-22, the Australian Government will also boost the states’ GST

entitlement each year with additional funding. In 2021-22, the Australian

Government will inject $600 million into the GST pool, followed by a further

$250 million in 2024-25. Each year, these amounts will grow in line with the

underlying growth of the GST and be distributed to the states in the same way as

the GST revenue.

In 2017–18, the states’ GST entitlement was $316.5 million lower than the advances

paid during that year. A prior year balancing adjustment has been made to states’ GST

payments in 2018–19 to reflect this.

A reconciliation of GST revenue, GST entitlement and GST payments to the states is

provided in Table 3.3.


77

Table 3.3: Reconciling GST revenue, GST entitlement and GST payments to the states

$million 2018-19 2019-20 2020-21 2021-22 2022-23

GST revenue 68,065 69,630 72,620 76,290 80,240

less Change in GST receivables 2,282 2,266 2,467 2,611 2,691

GST receipts 65,783 67,364 70,153 73,679 77,549

less Non-GIC penalties collected 120 140 140 150 160

less GST collected by Commonwealth

agencies but not yet remitted to

the ATO 33 24 3 -1 -1

plus GST pool boost - - - 600 631

GST entitlement 65,630 67,200 70,010 74,130 78,021

plus Prior year balancing adjustment -317

GST payments to the States(a) 65,313 67,200 70,010 74,130 78,021 (a) These GST payment estimates do not take into account the ATO’s GST administration costs, which will

be deducted from GST payments to the states throughout the year on a monthly basis.

Table 3.4 provides a reconciliation of the GST entitlement estimates since the

2018-19 Budget and the 2018–19 Mid-Year Economic and Fiscal Outlook (MYEFO). The

reconciliation accounts for policy decisions and parameter and other variations. The

GST entitlement in 2019–20 has been revised down by $1.8 billion since

the 2018-19 MYEFO.

Table 3.4: Reconciliation of the GST entitlement estimates since the 2018–19 Budget and 2018–19 MYEFO

$million 2018-19 2019-20 2020-21 2021-22

GST entitlement at 2018-19 Budget 67,320 69,790 73,510 77,270

Changes between 2018-19 Budget and MYEFO

Effect of policy decisions -15 653 786 1,496

Effect of parameter and other variations -675 -1,433 -1,696 -1,746

Total variations -690 -780 -910 -250

GST entitlement at 2018-19 MYEFO 66,630 69,010 72,600 77,020

Changes between 2018-19 MYEFO and 2019-20 Budget

Effect of policy decisions -2 9 13 14

Effect of parameter and other variations -998 -1,819 -2,603 -2,904

Total variations -1,000 -1,810 -2,590 -2,890

GST entitlement at 2019-20 Budget 65,630 67,200 70,010 74,130

The states’ GST entitlement is expected to reach $78 billion by 2022-23 — a 62 per cent

increase from $48 billion in 2012-13. The increase in GST to date has been underpinned

by solid growth in household consumption and dwelling investment. Continued

household consumption growth is expected to drive the forecast increases in GST. The

increase in GST entitlements includes the revenue measures the Australian

Government has introduced since the 2015-16 Budget, which have increased the states’

GST entitlements by an estimated $9.6 billion over the four years to 2022–23. Many of

these have been compliance measures to protect the base and integrity of the GST for

the states. These measures include:

• GST — applying to digital products and services imported by consumers (2015-16 Budget)

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78

• GST — compliance programme — three year extension (2015-16 Budget)

• Applying GST to low value goods imported by consumers (2016-17 Budget)

• Combatting fraud in the precious metals industry (2017-18 Budget)

• Improving the collection of GST on property transactions (2017-18 Budget)

• Tax Integrity Package — Black Economy Taskforce: extension of the taxable payments

reporting system to contractors in the courier and cleaning industries (2017-18 Budget)

• Tax Integrity Package — Black Economy Taskforce: one year extension of funding for ATO

audit and compliance activities (2017-18 Budget)

• A firm stance on tax and superannuation debts (2018-19 Budget)

• Black Economy Package — Combatting illicit tobacco (2018-19 Budget)

• Black Economy Package — Further expansion of taxable payments reporting (2018-19

Budget)

• Black Economy Package — New and enhanced ATO enforcement against the Black

Economy (2018-19 Budget)

• Levelling the playing field for online hotel bookings (2018-19 Budget)

• Reforms to combat illegal phoenixing (2018-19 Budget)

• GST — compliance program — four year extension (2018-19 MYEFO)

• Tax Integrity — increasing engagement and on-time payment of tax and superannuation

liabilities (2019-20 Budget)

Specific policy decisions taken since the 2018–19 MYEFO that affect the GST

entitlement are shown in Table 3.5. These decisions are estimated to increase the

amount of the GST entitlement by $51.1 million over the five years to 2022–23.


79

Table 3.5: Policy decisions since the 2018–19 MYEFO that affect the GST entitlement

$million 2018-19 2019-20 2020-21 2021-22 2022-23

Indirect Tax Concession Scheme — diplomatic,

consular and international organisation

concessions -1.8 .. .. .. ..

Extension of Temporary Graduate visa period

for regional graduates - - - 1.0 3.5

Increasing Work and Holiday Visa Cap for

Indonesia - 0.9 2.6 3.7 4.4

Better Distribution of Medical Practitioners - .. -1.0 -2.0 -2.0

Tax Integrity — increasing engagement and

on-time payment of tax and superannuation

liabilities - 8.0 10.9 11.4 11.5

Total -1.8 8.9 12.5 14.1 17.4

Detailed information on specific policy decisions taken since the 2018–19 MYEFO is

included in Budget Paper No. 2, Budget Measures 2019–20.

Distribution of the GST among the states

The Australian Government distributes the GST among the states based on the GST

revenue sharing relativities recommended by the Commonwealth Grants

Commission (the Commission). Further information on the Commission’s relativities is

included in Box 3.2.

The detailed calculation for the distribution of the GST entitlement in 2018–19 and

2019–20 is shown in Table 3.6. This method of calculation is prescribed in legislation in

the Federal Financial Relations Act 2009.

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80

Table 3.6: Calculation of GST entitlements

Estimated Adjusted Share of Share of

31 December GST population adjusted GST pool

population relativities (1) x (2) population $million

(1) (2) (3) (4) (5)

2018-19

NSW 8,047,504 0.85517 6,881,984 27.4% 17,952.6

VIC 6,530,704 0.98670 6,443,846 25.6% 16,809.6

QLD 5,051,640 1.09584 5,535,789 22.0% 14,440.8

WA 2,607,034 0.47287 1,232,788 4.9% 3,215.9

SA 1,742,682 1.47727 2,574,412 10.2% 6,715.7

TAS 531,230 1.76706 938,715 3.7% 2,448.8

ACT 424,673 1.18070 501,411 2.0% 1,308.0

NT 246,544 4.25816 1,049,824 4.2% 2,738.6

Total 25,182,011 na 25,158,769 100% 65,630.0

2019-20

NSW 8,189,290 0.87013 7,125,747 27.8% 18,713.8

VIC 6,689,940 0.98273 6,574,405 25.7% 17,265.9

QLD 5,136,342 1.05370 5,412,164 21.2% 14,213.6

WA 2,630,460 0.51842 1,363,683 5.3% 3,581.3

SA 1,756,128 1.46552 2,573,641 10.1% 6,759.0

TAS 536,817 1.75576 942,522 3.7% 2,475.3

ACT 433,858 1.23759 536,938 2.1% 1,410.1

NT 248,143 4.26735 1,058,913 4.1% 2,780.9

Total 25,620,978 na 25,588,012 100% 67,200.0


81

Box 3.2: The Commonwealth Grants Commission’s GST relativities

The GST is distributed to the states so that each state has the capacity to provide its citizens with a comparable level of government services — such as schools, hospitals, transport, housing and infrastructure. This method of distribution, known as horizontal fiscal equalisation (HFE), is based upon the principle that no Australian should be materially disadvantaged — in terms of their access to government services — simply because of the state in which they live.

The GST distribution is based on the GST revenue sharing relativities recommended by the Commonwealth Grants Commission (the Commission) after assessing the states’ relative fiscal capacities. This assessment takes into account the many natural differences between jurisdictions — such as their population, geography, resource endowments and demographics. These differences mean that the states can face very different costs in providing services to their citizens, and can have very different capacities to raise their own revenues.

Despite recent reductions in its GST relativity (in part due to its relatively low population growth), the Northern Territory continues to be the major beneficiary of the GST distribution process. The high costs it faces in delivering services to a remote population, coupled with its relatively low ability to raise its own revenue, means it needs a relatively high level of GST per person to have the capacity to deliver services at a comparable standard to other states.

In contrast, Western Australia will receive the lowest share of GST per person in 2019–20. Whilst the Commission’s calculations recognise that Western Australia also faces high costs in delivering services across a very large state, this is more than offset by the very high level of revenue it can collect, particularly from mining royalties.

In recognition of the unique circumstances affecting the Northern Territory and Western Australia, the Australian Government will provide an additional $1.5 billion in GST top-up payments to these states for 2019-20 ($1.2 billion to Western Australia and $252 million to the Northern Territory), building on the $1.7 billion in top-up payments already provided since 2014-15. The Australian Government will continue to offer top-up payments until 2021-22 to support the states’ transition to the new HFE system.

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GST administration

States compensate the Australian Government for the agreed costs incurred by the

ATO in administering the GST, including costs incurred by the Department of

Home Affairs. The GST administration budget for the ATO is estimated to be

$646.6 million for 2019-20, as shown in Table 3.7.

Table 3.7: Reconciliation of the GST administration budget

$million 2018-19 2019-20 2020-21 2021-22 2022-23

Administration budget at 2018-19 Budget 599.2 530.8 496.9 499.0 na

Total variations from 2018-19 Budget

to 2018-19 MYEFO(a) - 116.3 115.6 116.0 na

Administration budget at 2018-19 MYEFO 599.2 647.1 612.5 615.0 na

Changes from 2018-19 MYEFO

to 2019-20 Budget

Parameter variations - -0.5 -0.5 .. 3.4

Other variations - - - - -

Total variations - -0.5 -0.5 .. 3.4

Administration budget at 2019-20 Budget 599.2 646.6 612.0 615.0 618.0

less Prior year adjustment -

equals State government payments(b) 599.2 646.6 612.0 615.0 618.0 (a) These figures represent the costs of the GST compliance program — four year extension as announced

in the 2018-19 MYEFO. (b) The GST administration costs for 2018-19 were capped at the 2016-17 Budget estimate as the ATO

reviews its methodologies.

OTHER GENERAL REVENUE ASSISTANCE

Like GST, other general revenue assistance is provided to the states without

conditions, to spend according to their own budget priorities. These payments are

detailed below.

Table 3.8: Other general revenue assistance

$million 2018-19 2019-20 2020-21 2021-22 2022-23

ACT municipal services 40.1 40.7 41.4 42.0 42.7

Compensation for reduced royalties 34.4 32.6 29.2 25.9 22.9

Royalty payments 920.5 713.7 619.6 575.9 520.9

Snowy Hydro Limited tax compensation 75.0 - - - -

Transitional GST top-up payments(a) 434.0 1,066.3 556.1 292.9 -

Total other general revenue assistance 1,504.0 1,853.3 1,246.3 936.6 586.5 (a) The Government will pay Western Australia $434 million of its 2019-20 top-up payment in 2018-19.

Estimates beyond 2019-20 reflect the forecast GST relativities presented in the final report of the Productivity Commission Inquiry into Horizontal Fiscal Equalisation, and the Government’s interim response.

Australian Capital Territory municipal services

The Australian Government provides general revenue assistance to the

Australian Capital Territory to assist in meeting the additional municipal costs which

arise from Canberra’s role as the national capital. The payments also compensate the

Australian Capital Territory for additional costs resulting from the national capital

planning influences on the provision of water and sewerage services.


83

Compensation for reduced royalties

The Australian Government provides general revenue assistance to compensate

Western Australia for the loss of royalty revenue resulting from the removal of the

exemption of condensate from crude oil excise in the 2009–10 Budget.

Royalty payments

Western Australia

The Australian Government provides general revenue assistance to Western Australia

from royalties collected under the Offshore Petroleum (Royalty) Act 2006 in respect of the

North West Shelf oil and gas project off the coast of Western Australia. The Australian

Government collects these royalties because it has jurisdiction over offshore areas.

Royalties are shared between the Australian Government (approximately one third)

and Western Australia (approximately two thirds). These revenue sharing

arrangements are set out in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

Northern Territory

The Australian Government provides general revenue assistance to the

Northern Territory in lieu of royalties on uranium mining in the Ranger Project Area,

due to the Australian Government’s ownership of uranium in the Northern Territory.

Payments are made at a royalty rate of 1.25 per cent of the net proceeds of sales under

a continuing agreement established under the 1978 Memorandum of Understanding

between the Australian Government and the Northern Territory.

Snowy Hydro Limited tax compensation

Until June 2018, Snowy Hydro Limited was jointly owned by the Australian

Government, New South Wales and Victoria (with shareholdings of 13 per cent,

58 per cent and 29 per cent, respectively). The Australian Government provided

compensation payments to New South Wales and Victoria, in the form of general

revenue assistance, for Australian Government income taxes paid by Snowy Hydro

Limited. Under the Snowy Hydro Tax Compensation Deed between the then

shareholders, payments were made in proportion to each state’s shareholding. The

Australian Government now has full ownership of Snowy Hydro Limited and from

2019-20 payments to New South Wales and Victoria will no longer be required.

Transitional GST top-up payments

To assist the states in transitioning to the new horizontal fiscal equalisation system, the

Australian Government will provide short-term top-up payments, until 2021-22, to

ensure that no state has an effective GST relativity below 0.7 (or 4.66024 for the

Northern Territory).

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84

These payments will be made in accordance with the bilateral agreements between the

Australian Government and the relevant state.

MIRROR TAX ARRANGEMENTS

The Australian Government introduced mirror tax arrangements in 1998 to ensure that

the states were not financially disadvantaged by the High Court decision in Allders

International Pty Ltd v Commissioner of State Revenue (Victoria), which invalidated state

taxes on Commonwealth places. These arrangements mirror certain state taxes,

including payroll taxes, land taxes and stamp duties, with respect to Commonwealth

places. The states collect these mirror taxes on behalf of the Australian Government

and bear the administrative costs of collection.

All mirror tax revenues are credited to the Australian Government and simultaneously

appropriated to the states, with no net impact on the Australian Government’s budget

position, as shown in Table 3.9.

Table 3.9: Mirror taxes accrued on behalf of the states

$million 2018-19 2019-20 2020-21 2021-22 2022-23

Mirror taxes 607.3 636.1 665.5 698.4 726.7

less Transfers to state governments 607.3 636.1 665.5 698.4 726.7

Australian Government budget impact - - - - -

85

PART 4: DEVELOPMENTS IN THE CONSOLIDATED

NON-FINANCIAL PUBLIC SECTOR

INTRODUCTION

This Part provides a perspective on the financial position of all levels of government

in Australia.

It discusses trends in key fiscal indicators including the net operating balance, fiscal

balance, cash balance and net debt, at the Australian Government level, state level and

the consolidated level. The consolidated level includes the Australian, state and local

governments, and the multi-jurisdictional sector (primarily public universities).

This Part focuses on trends in the non-financial public sector (NFPS) which comprises

the general government sector and the public non-financial corporations (PNFC)

sector.1 The general government sector (GGS) provides non-market goods and services

such as policing, health and education. The PNFC sector comprises

government-controlled corporations engaged in providing market goods such as

electricity and public transport, but not financial services.

For further information on the fiscal indicators and the institutional structure of the

public sectors see Budget Paper No. 1, Budget Strategy and Outlook 2019–20,

Statement 10: Australian Government Budget Financial Statements.

State estimates in this Part come from the most recent publicly-available state

financial reports.

Aggregate state data are only available to 2021–22, so references to the forward

estimates in this Part relate to the period 2019–20 to 2021–22.

Additional data tables can be found in Appendix C (available online).

NET OPERATING BALANCE

The net operating balance measures, in accrual terms, the difference between recurrent

expenses and revenue for a given period. It is a measure of the sustainability of the

government’s fiscal position over time and indicates the sustainability of the existing

level of government services.

The Australian Government is expecting the NFPS to record a net operating surplus of

0.3 per cent of GDP in 2019–20.

1 Due to inter-sectoral transfers, NFPS does not always equal the sum of the general

government and PNFC sectors.

Budget Paper No. 3

86

In aggregate, the states are expecting the NFPS to record a net operating balance which

is just below zero per cent of GDP in 2019–20. The states are expecting NFPS revenue

as a proportion of GDP to be 16.0 per cent in 2019–20.

The consolidated NFPS net operating surplus is expected to improve from 0.4 per cent

of GDP in 2018-19 to 0.7 per cent of GDP in 2019–20.

The consolidated general government sector is expected to record a net operating

surplus of 1.1 per cent of GDP in 2019-20, improving to 1.9 per cent of GDP in 2021–22.

A breakdown of the consolidated NFPS net operating balance by sector is shown in

Chart 4.1.

Chart 4.1: Consolidated net operating balance by sector

-4

-3

-2

-1

0

1

2

3

4

-4

-3

-2

-1

0

1

2

3

4Per cent of GDPPer cent of GDP

Australian Government NFPS Total state NFPS

Other NFPS Total NFPS

Total GGS

Note: Consolidated NFPS numbers beyond 2019-20 have not been calculated as Australian Government data is not available for the PNFC sector. ‘Other NFPS’ includes local governments, the multi-jurisdictional sector and adjustments for transfers between jurisdictions. Source: ABS cat. no. 5512.0, most recent state estimates and Treasury.

FISCAL AND CASH BALANCES

The fiscal balance is an accrual term that measures the difference between a

government’s revenue and its capital and recurrent expenditure. The difference

between the fiscal balance and the net operating balance is the effect of investment in

non-financial assets, including infrastructure.

The fiscal balance of the Australian Government NFPS is expected to improve from a

deficit of 0.4 per cent of GDP in 2018-19 to just below zero per cent of GDP in 2019-20.

Part 4: Developments in the Consolidated Non-Financial Public Sector

87

In aggregate, states’ fiscal balance for the NFPS is expected to improve from a deficit of

1.7 per cent of GDP in 2018-19 to a deficit of 1.6 per cent of GDP in 2019–20.

A fiscal deficit of 1.6 per cent of GDP is expected in the consolidated NFPS sector

for 2019–20.

The consolidated general government sector fiscal balance is expected to improve

across the forward estimates, from a deficit of 0.6 per cent of GDP in 2019–20 to a

surplus of 0.5 per cent of GDP by 2021-22.

A breakdown of the consolidated NFPS fiscal balance by sector is shown in Chart 4.2.

Chart 4.2: Consolidated fiscal balance by sector

-8

-6

-4

-2

0

2

4

-8

-6

-4

-2

0

2


Australian Government NFPS Total state NFPSOther NFPS Total NFPS

Total GGS


The cash balance is the equivalent of the fiscal balance but measured on a non-accrual

basis, capturing both recurrent and capital payments and receipts as they occur.

The underlying cash balance of the Australian Government NFPS is expected to

improve from a deficit of 0.3 per cent of GDP in 2018-19 to a surplus of 0.2 per cent of

GDP in 2019–20.

The aggregate state NFPS cash balance is expected to remain in deficit of 1.5 per cent of

GDP in 2019-20.

The consolidated NFPS cash deficit is expected to improve from a deficit of 1.8 per cent

of GDP in 2018-19 to a deficit of 1.3 per cent of GDP in 2019-20.

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88

The consolidated general government sector cash balance is expected to improve from

a deficit of 0.8 per cent of GDP in 2019-20 to a surplus of 0.3 per cent of GDP

in 2021-22.

A breakdown of the consolidated NFPS cash balance by sector is shown in Chart 4.3.

Chart 4.3: Consolidated cash balance by sector

-8

-6

-4

-2

0

2

4

-8

-6

-4

-2

0

2


Australian Government NFPS Total state NFPSOther NFPS Total NFPSTotal GGS


NET DEBT

Net debt is the sum of selected financial liabilities (deposits held, advances received,

government securities, loans and other borrowing) less the sum of selected financial

assets (cash and deposits, advances paid, investments, loans and placements). Net debt

does not include superannuation-related liabilities.

Australian Government NFPS net debt as a proportion of GDP is expected to decrease

to 19.4 per cent in 2019-20.

Aggregate state NFPS net debt as a proportion of GDP is expected to increase to

9.2 per cent of GDP in 2019-20.

Consolidated NFPS net debt is expected to increase to 27.4 per cent of GDP in 2019-20.

Consolidated general government sector net debt is expected to decrease from

20.3 per cent of GDP in 2019-20 to 18.6 per cent of GDP in 2021-22.

Part 4: Developments in the Consolidated Non-Financial Public Sector

89

Australian Government net debt is expected to continue to make up the bulk of

consolidated net debt.

A breakdown of consolidated NFPS net debt by sector is shown in Chart 4.4.

Chart 4.4: Consolidated net debt by sector (as at end of financial year)

-10

-5

0

5

10

15

20

25

30

35

40

-10

-5

0

5

10

15

20

25

30

35


Australian Government NFPS Total state NFPSOther NFPS Total NFPSTotal GGS


91

APPENDIX A: PARAMETERS AND FURTHER

INFORMATION

This appendix provides information on the parameters used in producing this

Budget Paper.

Budget Paper No. 1, Budget Strategy and Outlook 2019–20, Statement 2: Economic Outlook,

provides information on the forecasting approach used in the 2019–20 Budget.

POPULATION

Population data are used to distribute funding between the states and in the

calculation of annual growth factors.

Estimates of state populations

Table A.1 sets out the state population series used in this Budget Paper.

Table A.1: Population by state, at 31 December million NSW VIC QLD WA SA TAS ACT NT Total

2018 8.048 6.531 5.052 2.607 1.743 0.531 0.425 0.247 25.182

2019 8.189 6.690 5.136 2.630 1.756 0.537 0.434 0.248 25.621

2020 8.335 6.853 5.223 2.654 1.770 0.543 0.443 0.250 26.070

2021 8.483 7.017 5.311 2.677 1.784 0.548 0.453 0.251 26.525

2022 8.632 7.183 5.399 2.700 1.798 0.554 0.462 0.253 26.981

The state populations for 2018 to 2022 are Treasury estimates as at 31 December in the

relevant year. They are constructed using the latest demographic data available from

the Australian Bureau of Statistics (ABS) and assumptions on fertility, mortality, net

overseas migration and interstate migration.

Fertility

The total fertility rate is assumed to be 1.781 babies per woman in 2018, and is assumed

to rise to 1.900 babies by 2021 and remain stable for the rest of the projection period.

These assumptions are consistent with those in the 2015 Intergenerational Report.

Mortality

The mortality assumptions are based on the medium assumptions used in the ABS Population Projections, Australia, 2017-2066 (cat. no. 3222.0). Life expectancy is projected

to improve over time, but at a declining rate. The difference between life expectancies

across the states and territories is assumed to persist.

Net overseas migration

Table A.2 shows the net overseas migration assumptions used in this Budget Paper.

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Table A.2: Net overseas migration 2018 2019 2020 2021 2022

Net overseas migration, Australia 259,600 271,700 271,300 267,600 263,800

State shares of net overseas migration are estimated by using a weighted average of

the three most recent observed years — 2015, 2016 and 2017 — with weights of one,

two and four respectively.

Interstate migration

Table A.3 shows the net interstate migration assumptions used in this Budget Paper.

Table A.3: Net interstate migration

million NSW VIC QLD WA SA TAS ACT NT Total

2019 -16,000 16,800 18,400 -12,000 -6,500 1,500 700 -2,900 -

2020 -16,000 16,800 18,400 -12,000 -6,500 1,500 700 -2,900 -

2021 -16,000 16,800 18,400 -12,000 -6,500 1,500 700 -2,900 -

2022 -16,000 16,800 18,400 -12,000 -6,500 1,500 700 -2,900 -

Similar to state shares of net overseas migration, these estimates of migration are based

on a weighted average of the three most recent observed years — 2015, 2016 and 2017

— with weights of one, two and four respectively. Due to data lags, the 2018

observation includes assumptions for the September and December quarters based on

weighted averages of arrivals and departures for the respective September and

December quarters in 2015 to 2017.

WAGE COST INDICES

Table A.4 shows estimated growth in the wage cost indices used in this Budget Paper,

rounded to the nearest quarter of a per cent.

Table A.4: Wage cost indices per cent 2018-19 2019-20 2020-21 2021-22 2022-23

Wage cost index - 1 1 1/2 1 1/2 1 1/2 1 1/2 1 1/2

Wage cost index - 6 1 1/2 1 1/2 2 2 1 3/4

DATA SOURCES

The information in Part 4, Appendix B and Appendix C of this Budget Paper is

consistent with the ABS Government Finance Statistics reporting framework for the

public sector.

Australian Government data are sourced from the Australian Government Final

Budget Outcomes, ABS, and Australian Government Consolidated Financial

Statements. See Budget Paper No. 1, Budget Strategy and Outlook 2019–20, Statement 10:

Historical Australian Government Data, for more information.

Appendix A: Parameters and further information

93

State data for 2017-18 onwards are from the most recent publicly available state

financial reports (states’ 2017-18 final budget outcomes, 2018-19 mid-year financial

reports and NSW 2019 Pre-election Budget Update). State data for years prior to 2017-18

are sourced from the ABS. Where ABS data is not available, estimates from states’

annual financial reports have been used.

FURTHER INFORMATION

Several publications of the ABS also provide information that is relevant to analysing

federal financial relations data, including:

• Australian Demographic Statistics (cat. no. 3101.0);

• Overseas Arrivals and Departures, Australia (cat. No 3401.0);

• Population Projections, 2017–2066 (cat. no. 3222.0);

• Taxation Revenue, Australia (cat. no. 5506.0);

• Government Finance Statistics, Australia (cat. no. 5512. 0);

• Australian System of Government Finance Statistics — Concepts, Sources and Methods

(cat. no. 5514.0);

• Information Paper: Developments in Government Finance Statistics (cat. no. 5516.0);

and

• Information Paper: Accruals Based Government Finance Statistics (cat. no. 5517.0)

Commonwealth Grants Commission publications provide information about the

distribution of GST revenue. In relation to the 2019-20 financial year, the most relevant

publication is the Report on GST Revenue Sharing Relativities — 2019 Update.

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